Ch 25 - Ch. 25 Money- any commodity or token that is...

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Ch. 25 Money- any commodity or token that is generally accepted as the means of payment Means of payment- is a method of paying for goods or services or of settling a debt. Money is used for 3 main purposes: Medium of exchange Unit of account Store of value Money consists of: Currency Deposits at banks and other financial institutions Currency- the coins and bank of Canada notes that we use today Measure of money M1- currency held outside the banks plus demand deposits at chartered banks that are owned by individuals and businesses, nothing owned by banks or govt M2+ consists of M1 + personal savings deposits and non-personal notice deposits at chartered banks plus all deposits at trust and mortgage loan companies, credit unions, caisses populaires, and other financial institutions THE BANKING SYSTEM Steps in the banking system Depository institutions The bank of Canada The payments system Depository institutions- private firm that takes deposits from households and firms and makesloans to other households and firms Made up of three types of institutions
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a. Chartered banks- private firm bchartered un the bank act to receive deposits or make
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This note was uploaded on 04/18/2008 for the course ECONOMIC 020 taught by Professor Parkin during the Spring '08 term at UWO.

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Ch 25 - Ch. 25 Money- any commodity or token that is...

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