This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Money is something that fulfills: Unit of count Medium of exchange Store of value Grenshen’s law bad money circulates good money, drives out good money Types of money Commodity money – seashell, rabbit skin Fiat money High money M0 M1 = M0 + Checking Account (CA) M2 = M1 + Small Saving accounts Small: 100,000 or less because FDIC allowed under 100,000 (now is 250,000) MM how you can choose your assets to reduce risks but increase yields Assume 1. Holds no cash 2. Hold only checking accounts 3. Banks always fully lend out...
View Full Document