econ101fall11lecture14

econ101fall11lecture14 - Money and Banking Required...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Money and Banking Required Readings Chapter 12
Background image of page 1

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

View Full DocumentRight Arrow Icon
Basic Questions • How does money affect the economy? • The Federal Reserve Bank is the U.S. Central Bank: How does the Fed carry out monetary policy? • How does monetary policy affect the economy? • What has the Government done to insure the safety of money supply?
Background image of page 2
Functions of Money • Unit of account • Medium of Exchange • Store of wealth
Background image of page 3

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

View Full DocumentRight Arrow Icon
Unit of Account • Unit by which: Prices of Goods & Services are measured Wealth is measured Debts are stated • Various Countries US: Dollar UK: Pound Much of Europe: EURO Purposes :
Background image of page 4
Medium of Exchange • Money serves as means of payment • Must be • Other Characteristics: Divisible, Storable, Durable & Easily Identifiable
Background image of page 5

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

View Full DocumentRight Arrow Icon
Barter vs. Money Economy Barter Economy : Exchange requires “Double Coincidence of Wants” Money Economy : Individuals sell labor services for Money Money is used to purchase goods & services
Background image of page 6
Store of Wealth • Money can be used to store wealth • Does not pay much interest • Dominated by other assets • Secondary Function of Money
Background image of page 7

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

View Full DocumentRight Arrow Icon
Forms of Money Definition of Money :
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 27

econ101fall11lecture14 - Money and Banking Required...

This preview shows document pages 1 - 9. Sign up to view the full document.

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