ECN 481 (1), Money

ECN 481 (1), Money - ECNDon Dutkowsky 481 Professor of...

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ECN 481 Don Dutkowsky Professor of Economics Office -- 110 Eggers Hall Phone -- 443-1918
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Roles of Money -- Facilitator of Trade Medium of Exchange -- Money is exchanged for goods and services Standard of Value -- Value is measured in dollars (the “price tag”)
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Other Roles of Money Standard of Deferred Payments -- Loans and financial instruments are denominated in terms of money. Store of Value -- People can use money when they wish.
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Definitions of Money M1 = Currency held by the public + Demand Deposits + Travelers Checks + Other Checkable Deposits M2 = M1 + Savings Deposits (including MMDAs) + Small Time Deposits + Retail Money Market Mutual Funds
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Definitions of Money Supply Components Currency Held by the Public -- Paper money held by consumers and firms.
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Demand Deposits and Checking Privileges Demand Deposits (DD)-- Non-interest bearing deposits offered by commercial banks. They have checkable privileges with no restrictions on size of check or number of checks per month.
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More Components
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