Chapter 3 What Is Money?.

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Presentation transcript:

Chapter 3 What Is Money?

Meaning and Function of Money Economist’s Meaning of Money 1. Anything that is generally accepted in payment for goods and services 2. Not the same as wealth or income Functions of Money 1. Medium of exchange 2. Unit of account 3. Store of value Evolution of Payments System 1. Precious metals like gold and silver 2. Paper currency (fiat money) 3. Checks 4. Electronic means of payment 5. Electronic money: Debit cards, Stored-value cards, Smart cards, E-cash © 2004 Pearson Addison-Wesley. All rights reserved

Federal Reserve’s Monetary Aggregates

Growth Rates of Fed’s Monetary Aggregates © 2004 Pearson Addison-Wesley. All rights reserved

How Reliable are the M2 Money Data: Data Revisions © 2004 Pearson Addison-Wesley. All rights reserved

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