LectureNote3

LectureNote3 - the economy Store of Valueused to save...

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LECTURE THREE Meaning and Functions of Money ECONOMICS 209 Professor Kevin Huang Vanderbilt University
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3-1 Meaning of Money Money (money supply)—anything that is generally accepted in payment for goods or services or in the repayment of debts Wealth—the total collection of pieces of property that serve to store value Income—flow of earnings per unit of time
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3-2 Functions of Money Medium of Exchange—promotes economic efficiency by minimizing the time spent in exchanging goods and services ± Must be easily standardized ± Must be widely accepted ± Must be divisible ± Must be easy to carry ± Must not deteriorate quickly Unit of Account—used to measure value in
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Unformatted text preview: the economy Store of Valueused to save purchasing power; most liquid of all assets but loses value during inflation 3-3 Evolution of the Payments System Commodity Money Fiat Money Checks Electronic Payment E-Money 3-4 3-5 How Reliable are the Money Data? Revisions are issued because: Small depository institutions report infrequently Adjustments must be made for seasonal variation We probably should not pay much attention to short-run movements in the money supply numbers, but should be concerned only with longer-run movements 3-6 3-7...
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This note was uploaded on 04/07/2008 for the course ECON 209 taught by Professor Professor during the Spring '08 term at Vanderbilt.

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LectureNote3 - the economy Store of Valueused to save...

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