S10 MyCh07 - Ch. 7 Money and the Asset Market Overview What...

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Ch. 7 Money and the Asset Market Overview What Is Money ? The Supply for Money Portfolio Allocation and the Demand for Assets Asset Market Equilibrium The Demand for Money Money Growth and Inflation 1
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2 We now come to the last of the three markets – The Asset Market Its position is as follows : Flow Stock Ch. 3 Labor: N Ch. 4 Goods: I, C Ch. 7 Assets: K, M Now: t Ch. 6 Growth Ch. 8 Cycles Future General perspective Where recession comes from
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What Is Money ? Money: Assets widely used and accepted as payment Adopted for its three functions – As unit of account As medium for exchange As storage for value 3
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As such, money is a convenience for oneself, in planning for society, in interaction, by common acceptance. may or may not be identical to the medium for exchange if yes, an additional convenience if not, it is for something more stable in value , in inflation, thus, implying inflation may have ‘hidden cost’ and people adopt ‘dollarization’ sometimes, against the law. 4
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S10 MyCh07 - Ch. 7 Money and the Asset Market Overview What...

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