Barro+PP-Ch.10 - Concepts of Money Fiat money has value due...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Macroeconomics - Barro Chapter 10 1 Concepts of Money Fiat money has value due to government fiat, rather than through intrinsic value. Commodity money , such as gold and silver coins, which do have intrinsic value. High-powered money , which adds the deposits held by banks and other depository institutions At the Federal Reserve. Another name for high- powered money is the monetary base .
Background image of page 1

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

View Full DocumentRight Arrow Icon
Macroeconomics - Barro Chapter 10 2 Concepts of Money Monetary aggregate A monetary aggregate is the total dollar stock of a group of financial assets defined to be money. The most common definition, called M1 Checkable deposits issued by banks and other financial institutions.
Background image of page 2
Macroeconomics - Barro Chapter 10 3 Concepts of Money Monetary aggregate M2 includes household holdings of savings deposits, small-time deposits, and retail money-market mutual funds. The M2 definition goes beyond the concept of money as a medium of exchange. In our model, it is best to use a narrower definition of money, for example, as currency held by the public.
Background image of page 3

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

View Full DocumentRight Arrow Icon
Chapter 10 4 The Demand for Money Money is hand-to-hand currency Assume that the interest rate paid on money is zero. Bonds and ownership of capital
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/19/2011 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue University-West Lafayette.

Page1 / 20

Barro+PP-Ch.10 - Concepts of Money Fiat money has value due...

This preview shows document pages 1 - 5. Sign up to view the full document.

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