MACROECONOMICS EXAM 3

MACROECONOMICS EXAM 3 - ECON- MACRO CH. 10 money part of a...

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ECON- MACRO CH. 10 money part of a person’s wealth that can be readily used for transactions currency + deposits = money 3 functions of money medium of exchange store of value unit of account barter exchange goods exchanged ONLY for other goods coincidence of wants required in order to make transactions in a barter system gold standard monetary system in which the price of gold in terms of paper money is fixed Federal Open Market Committee decisions about the supply of currency and deposits assets of a commercial bank reserves loans bonds banks firms that channel funds from savers to investors required reserve ratio fraction of deposits that commercial banks are required to hold as reserves at the Fed currency + reserves monetary base money multiplier how much the change in the monetary base changes the money supply hyperinflation extremely high inflation currency deposit ratio amount of currency/amount of deposits nominalGDP = velocity x money CHAPTER TEST
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1) M1 currency + checking deposits 2) M2 currency + checking, time, and savings deposits 3) percentage of M1 consists of currency 1/3 4) means of facilitating a barter system NOT function of money 5) deposits made by individuals and firms NOT considered assets of a bank
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This note was uploaded on 04/29/2008 for the course ECON 1140 taught by Professor Johnson during the Spring '08 term at Toledo.

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MACROECONOMICS EXAM 3 - ECON- MACRO CH. 10 money part of a...

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