Lecture_10

Lecture_10 - Lecture 10 Econ 2 Monetary Economics Tracking...

Info iconThis preview shows pages 1–19. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture 10 Econ 2 Monetary Economics
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Tracking the Economy
Background image of page 2
Tracking the Economy
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Tracking the Economy Job openings and labor turnover survey Today’s report: Jolts report
Background image of page 4
Question on Money In the U.S. today, money is: A) backed by gold B) backed by gold and silver C) not backed by anything D) backed by U.S. Treasury Certificates
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Question on Money In the U.S. today, money is: C) not backed by anything
Background image of page 6
Fiat Money Money that is not backed Main Entry: fi·at Pronunciation: \ ˈ f ē - ә t, - ˌ at, - ˌ ät; ˈ f ī - ә t, - ˌ at\ Function: noun Etymology: Latin, let it be done, 3d singular present subjunctive of fieri to become, be done Date: circa 1631 1 : a command or act of will that creates something without or as if without further effort 2 : an authoritative determination : dictate <a fiat of conscience> 3 : an authoritative or arbitrary order : decree <government by fiat >
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Fiat Money Why accept fiat money? A) The gov. insures it B) Because others will accept it C) It’s a mystery D) The government decreed it to be good
Background image of page 8
Fiat Money Why accept fiat money? B) Because others will
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Money Money Any asset that can be used in making purchases Examples » Currency » Coins » Checks
Background image of page 10
Money Credit cards A) are not considered as money B) are considered as money C) are considered as loans D) A and C E) B and C
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Money Credit cards D) A and C
Background image of page 12
Why Money? Because barter is difficult! Barter The direct trade of goods or services for other goods or services
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Why Money? Therefore, money makes it easier to trade With barter some trades would not take place Makes us worse off compared to a world with money
Background image of page 14
Desirable Properties of Money Medium of Exchange—promotes economic efficiency by minimizing the time spent in exchanging goods and services Must be easily standardized Must be widely accepted Must be divisible Must be easy to carry Must not deteriorate quickly Portable Recognizable Divisible Durable
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Desirable Properties of Money Unit of Account—used to measure value in the economy Numeraire: An economic term that represents a unit of account. In French, the term means "money", "coinage" or "face value". A numeraire is usually applied to a single good, which becomes the base good. All similar goods are then valued and priced against the base good. This comparison makes it possible to identify which goods are worth more than others.
Background image of page 16
Desirable Properties of Money Store of Value—used to save purchasing power; most liquid of all assets but loses value during inflation
Background image of page 17

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Types of Money A very, very brief history
Background image of page 18
Image of page 19
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/29/2010 for the course ECON 3A taught by Professor Loster during the Summer '07 term at UCSB.

Page1 / 91

Lecture_10 - Lecture 10 Econ 2 Monetary Economics Tracking...

This preview shows document pages 1 - 19. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online