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Unformatted text preview: Macro Final Exam 08/04/2011 13:24:00 Money is the set of assets that people use to buy goods/services regularly Medium of exchange Narrowest definition of money supply is M1 includes demand deposits, travelers checks, other checkable accounts and cash/currency remember all 4 for the test Two types: 1) Commodity money Tangible metal like gold silver and copper US dollar was backed by gold until 1971 and was strongest in the world CM the money with intrinsic value as a commodity 2) fiat money today US currency is a fiat money the paper money with no intrinsic value backed up and accepted by government decree Barter System main problem medium of exchange Must have reciprocal demand The Federal Reserve System a.k.a. The FEd founded in 1913 Functions of the Fed the Fed 1) prints money 2) acts as a bank of banks 3) loans out money to the banks 4) clearing out state checks 5) act as a last resort for banks the Fed does everything accept loan out money to individuals the Fed has the head office in Washington DC with twelve regional Federal Reserve Banks the Fed is runned by the board of governors seven members is in the board of governors and sanctioned by the Senate o their term is fourteen years The chairmans term is for four years One point extra credit there are two federal regional banks that are situated in the same state find out where they are and email to Geeta Missouri is the only state to have two Federal Reserve Banks They are from Kansas City and St. Louis First Town Bank In T accounts deposits are liabilities and reserves are assets Fraction of deposit as a reserve to bank deposits....
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This note was uploaded on 10/22/2011 for the course ACCT 3551 taught by Professor Brown during the Spring '11 term at UNC.
- Spring '11