bcc macro 17 ch 12,13,14

bcc macro 17 ch 12,13,14 - 12 Money and Banking Money...

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12 Money and Banking
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Money Defined The Functions of Money Medium of Exchange Unit of Account Store of Value Components of the Money Supply Currency Checkable Deposits Other Liquid Savings Deposits
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Money Defined Currency Coins and Paper Money Token Money Federal Reserve Notes Checkable Deposits Commercial Banks Thrift Institutions A Qualification Government, Federal Reserve, and Banks Excluded from M 1
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Money Defined M 1 Currency Checkable Deposits M 2 Near-Monies Savings Deposits Including Money Market Deposit Accounts (MMDA) Small Time Deposits Money Market Mutual Funds (MMMF)
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Money Defined M 1 M 2 54% 46% M 1 20% Savings Deposits Including Money Market Deposit Accounts (MMDA) Small Time Deposits Money Market Mutual Funds Held By Individuals (MMMF) Currency Checkable Deposits 15% 11% 54% $1,375 Billion $6,758 Billion February 2006 Totals + + + + +
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Money Defined Money Definition MZM Money Zero Maturity Immediately Available From M 2 Subtract Small Time Deposits Add Back Money Market Mutual Funds Owned by Businesses (MMMF) Slightly Larger than M 2 February 2005 M 2 was $6,758 Billion and MZM was $6,934 Billion
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Money Supply Are Credit Cards Money? What “Backs” the Money Supply? Stable Value of Money Money as Debt Acceptability Legal Tender Relative Scarcity
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Money and Prices Purchasing Power of Money varies inversely with the price level (Value = 1 / Price Level) Example: If the price level increases by 20% = 1/1.20 = . 833 money lost 16.67% of its value: (1.000 - .833 = .1667) Inflation and Acceptability
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WHAT BACKS THE MONEY SUPPLY? So, What Backs the Money Supply? Stable Value! through. .. Appropriate Fiscal Policy Intelligent Management of the Money Supply – Monetary Policy
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Federal Reserve System The Federal Reserve and the Banking System Historical Background Board of Governors Federal Open Market Committee (FOMC) Open Market Operations
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Federal Reserve System The 12 Federal Reserve Banks Source: Federal Reserve Bulletin
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Federal Reserve System The 12 Federal Reserve Banks Private and Public Control Central Bank Quasi-Public Banks Banker’s Banks Commercial Banks and Thrifts
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Federal Reserve System Fed Functions and the Money Supply Issuing Currency Setting Reserve Requirements and Holding Reserves Lending Money to Banks and Thrifts Discount Rate Check Collection Fiscal Agent for U.S. Supervising Banks Controlling the Money Supply
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The Global Greenback U.S. Currency Circulating Abroad Russians $40 Billion Argentineans $7 Billion Polish $6 Billion U.S. Profits from Dollars Leaving Black Markets and Illegal Activities Seeking Stable Purchasing Power Soviet Union Collapse Brazil Inflation Issues Asian Market Exchanges Last Word
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Money Creation 13 C H A P T E R
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BALANCE SHEET OF A COMMERCIAL BANK ASSETS = LIABILITIES + NET WORTH The Goldsmiths, gold rarely redeemed Fractional Reserve Banking System Money Creation & Reserves Bank Panics & Regulation
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bcc macro 17 ch 12,13,14 - 12 Money and Banking Money...

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