money-market

money-market - Money & Banking Sandeep Bhaskar Temple...

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Unformatted text preview: Money & Banking Sandeep Bhaskar Temple University Sandeep Bhaskar (Temple University) Money & Banking 1 / 52 Outline 1 Introduction 2 Money 3 Money Markets 4 The Fed, Money Market, and Real GDP 5 The Federal Reserve System 6 Depository Institutions Sandeep Bhaskar (Temple University) Money & Banking 2 / 52 Introduction Money What is money? Why do we need money? How is money different from other goods? How long have we used money for? What has been used as money? What is the real value of money? Sandeep Bhaskar (Temple University) Money & Banking 3 / 52 Introduction Money Markets What is demand for money? How can we define demand for money? What is supply of money? What is price of money? What do we mean by money market equilibrium? Sandeep Bhaskar (Temple University) Money & Banking 4 / 52 Introduction The Fed, Money Markets, and Real GDP What happens to money market equilibrium with changes in demand or supply of money? What are the short-run and long-run impacts of changes in money market equilibrium? What is the quantity theory of money? Does the quantity theory hold in practice? Sandeep Bhaskar (Temple University) Money & Banking 5 / 52 Introduction The Federal Reserve System What is the Federal Reserve System? How is the Federal Reserve System organized? What is the function of the Fed? How does the Fed accompalish those tasks? Sandeep Bhaskar (Temple University) Money & Banking 6 / 52 Introduction Banking & Financial Institutions What is a commercial bank? How is it different from other financial institutions? Who regulates banks? What is the process of money creation? Sandeep Bhaskar (Temple University) Money & Banking 7 / 52 Money Money Money is the primary medium of exchange for goods and services. Money has been used for at least the last 75000 years. Earliest known users lived in present day South Africa. Primary use: bride purchases, hunting rights. Sandeep Bhaskar (Temple University) Money & Banking 8 / 52 Money Barter In the absence of money we can exchange goods and services. The exchange of one good for another is called barter . The problem with barter is: It requires an improbable coincidence of wants . Money eliminates this requirement of coincidence of wants. Sandeep Bhaskar (Temple University) Money & Banking 9 / 52 Money What is Money? Any object that satisfies the following three characteristics can be called money: It is a medium of exchange. It is a unit of account. It is a store of value. Sandeep Bhaskar (Temple University) Money & Banking 10 / 52 Money Medium of Exchange Any good that is consistently used as an intermediate object of trade is called a medium of exchange. A medium of exchange eliminates the double coincidence of wants requirement in the barter system....
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This note was uploaded on 05/04/2011 for the course ECON 1101 taught by Professor Rappoport during the Fall '08 term at Temple.

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money-market - Money & Banking Sandeep Bhaskar Temple...

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