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10 Intl Econ Notes

10 Intl Econ Notes - Demand of money = supply of money o...

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Int’l Econ Notes 5/13/09 Money is a 1) store of value 2) unit of account 3) medium of exchange (cannot really barter things, must have money to buy other things) Different defs of money o M0(monetary base): currency in circulation + bank deposits at FRB (adjusted for the effects of changes in reserve req) o M1: M0 + checkable deposits + travelers checks o M2: M1 + saving deposits + time deposits under 100K + retail money mkt mutual funds Supply of Money o
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Unformatted text preview: Demand of money = supply of money o Supply of money: central bank is the one that can print money, so they can influence the amt of money supplied in the econ • Good formula for final: Slide 17 • Slide 18: another important equation to remember • Growth rate: how much more money you have in econ than previous year (the money that is printed vs. the old money that is destroyed); amount of money in econ outstanding is always positive •...
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