Chapter 3 Outline

Chapter 3 Outline - Department of Economics So Chapter 3:...

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Unformatted text preview: Department of Economics So Chapter 3: What Is Money? Econ 330: Money and Banking Fall 2007 Prof. Joseph Santos This outline draws from Frederic Mishkins Money, Banking and Financial Markets (2007) and, as such, contains copy written material. Please do not quote without proper citation. Department of Economics So [1] Meaning of Money Economists define money as anything that is generally accepted in payment for goods or services or in the repayment of debts. Currency (paper money and coins) clearly fits this definition of money. But, there is no single empirical definition of money. See Slides 4.1 and 4.2 Money versus wealth versus income Money, like wealth, is a stock variable; income is a flow variable. [1] Meaning of Money [2] Functions of Money [3] Evolution of the Payments System [4.1] Empirical Measures of Money - Basics [4.2] Empirical Measures of Money Specifics [5] How Reliable Are the Money Data? This outline draws from Frederic Mishkins Money, Banking and Financial Markets (2007) and, as such, contains copy written material. Please do not quote without proper citation. Department of Economics So [2] Functions of Money Medium of Exchange The use of money as a medium of exchange promotes economic efficiency by minimizing the time spent exchanging goods and services. Unit of Account Store of Value Money is not unique as a store of value; any asset can be used to store wealth. Many such assets have advantages over money as a store of value: they often pay interest, appreciate and provide services....
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This note was uploaded on 04/09/2008 for the course ECON 330 taught by Professor Santos during the Spring '08 term at SD State.

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Chapter 3 Outline - Department of Economics So Chapter 3:...

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