1 Money:types 1.fiat money has no intrinsic value example:the paper currency we use 2.commodity money ·has intrinsic value ·examples.gold coins, cigarettes in P.O.W.camps CHAPTER 7 Money and Inflation slide 5
CHAPTER 7 Money and Inflation slide 5 Money: types 1. fiat money • has no intrinsic value • example: the paper currency we use 2. commodity money • has intrinsic value • examples: gold coins, cigarettes in P.O.W. camps 1
1 Discussion Question Which of these are money? a.Currency b.Checks c.Deposits in checking accounts (called demand deposits) d.（ Credit cards e. Certificates of deposit (called time deposits) CHAPTER 7 Money and Inflation slide 6
CHAPTER 7 Money and Inflation slide 6 Discussion Question Which of these are money? a. Currency b. Checks c. Deposits in checking accounts (called demand deposits) d. Credit cards e. Certificates of deposit (called time deposits) 1
The money supply monetary policy -The money supply is the quantity of money available in the economy. -Monetary policy is the control over the money supply. CHAPTER 7 Money and Inflation slide 7
CHAPTER 7 Money and Inflation slide 7 The money supply & monetary policy ▪ The money supply is the quantity of money available in the economy. ▪ Monetary policy is the control over the money supply. 1
Money supply measures,April 2002 Symbol Assets included Amount (billions) C Currency $598.7 M1 C demand deposits, 1174.0 travelers'checks, other checkable deposits M2 M1 small time deposits, 5480.1 savings deposits, money market mutual funds, money market deposit accounts M3 M2 large time deposits, 8054.4 repurchase agreements, institutional money market mutual fund balances CHAPTER 7 Money and Inflation slide 8
CHAPTER 7 Money and Inflation slide 8 Money supply measures, April 2002 _Symbol Assets included Amount (billions)_ C Currency $598.7 M1 C + demand deposits, 1174.0 travelers’ checks, other checkable deposits M2 M1 + small time deposits, 5480.1 savings deposits, money market mutual funds, money market deposit accounts M3 M2 + large time deposits, 8054.4 repurchase agreements, institutional money market mutual fund balances 1
1 The central bank Monetary policy is conducted by a country's central bank. In the U.S., the central bank is called the Federal Reserve ("the Fed"). The Federal Reserve Building Washington,DC Return CHAPTER 7 Money and Inflation slide 9
CHAPTER 7 Money and Inflation slide 9 The central bank ▪ Monetary policy is conducted by a country’s central bank. ▪ In the U.S., the central bank is called the Federal Reserve (“the Fed”). The Federal Reserve Building Washington, DC Return 1