Chap 29 PwrPnts - Chapter 29 The Monetary Money is the set System in an economy of assets that people regularly use to buy goods and services from other

Chap 29 PwrPnts - Chapter 29 The Monetary Money is the set...

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Chapter 29 : The Monetary System Money is the set of assets in an economy that people regularly use to buy goods and services from other people. The functions of money in the economy Medium of exchange Unit of account Store of value 1
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Money in the U.S. economy Currency Paper bills and coins in the hands of the public Demand deposits Balances in bank accounts that depositors can access on demand by writing a chec k 5
Figure Two measures of the U.S. money stock 1 6 The two most widely followed measures of the money stock are M1 and M2. This figure shows the size of each measure in 2007 For our purposes: “money stock” = “money supply” = “quantity of money in the economy”
Where is all the currency? 7
The Federal Reserve System The Federal Reserve (The Fed) The central bank of the United States Central bank Institution designed to Oversee the ban king system Regulate the qu antity of money in the economy 8

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