Chapter Six The Demand for Money 1. Monetary Aggregates Components of the Money Stock M 0 －－－ Currency in Circulation M 1 －－－ M 1 －－－ M 2 －－－ M 2 －－－ M.

Slides:



Advertisements
Similar presentations
Multiple Deposit Creation and the Money Supply Process
Advertisements

Chapter 18: Money Supply & Money Demand
Multiple Deposit Creation and the Money Supply Process
Money and the Banking System
Demand of Money.
Money, Banks, and the the Central Bank Lecture notes 5 Instructor: MELTEM INCE.
The Goods Market, Money, and Foreign Exchange The Linkages.
Chapter 4: Money and Inflation
Equilibrium Income Keynesian Approach: AE d determines Y (income/output) produced Can there be limitations to this link? YES because interest rates and/or.
MONEY. MONETARY AGGREGATES M0 – base money (cash + deposits of the banks with the central bank) M1 – money, narrow money (cash + demand deposits) M2 –
Macro Chapter 13 Presentation 1. Fractional Reserve System US Banking System Only a portion (fraction) of checkable deposits need to be held as cash in.
Activity 38 The mechanics of monetary policy. Baseline case Assets Liabilities The FED Treasury Securities Federal Reserve Notes Checkable deposits Loans.
Chapter 17. Money Supply Process Fed Balance Sheet Fed and the Monetary Base Deposit Creation The money multiplier Fed Balance Sheet Fed and the Monetary.
Chapter 15 Multiple Deposit Creation and the Money Supply Process.
Copyright © 2010 Pearson Education. All rights reserved. Chapter 19 The Demand for Money.
Central Banking. I. The Federal Reserve System –The Board of Governors –Advisory Councils Federal Advisory Council Consumer Advisory Council Thrift Institutions.
Monetary Policy and the Federal Reserve
C h a p t e r thirteen © 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick O’Brien—1 st ed. Prepared by: Fernando & Yvonn.
Chapter 15. Money Supply Process
© 2004 Pearson Addison-Wesley. All rights reserved 15-1 Multiple Expansion of Money and Credit: Fed buys bond from bank / bank lends to limit public holds.
Money, Monetary Policy and Economic Stability
All Rights Reserved Ch. 15: 1 Principles of Economics second edition © Oxford Fajar Sdn. Bhd. ( T) 2010 MONEY AND BANKING CHAPTER 15.
Money and Monetary Policy. Meaning and Functions of Money The functions of money –medium of exchange –means of storing wealth –means of evaluation –means.
1 Money and the Federal Reserve Bank The objective is to understand the actions of the Central Bank and its impact on the economy.
ทฤษฎีและนโยบาย การเงิน Monetary Theory and Policy Money Supply Process Reference: Money, the Financial System, and the Economy ( R. Glenn Hubbard )
1 Chapter 15: Multiple Deposit Creation and the Money Supply Process.
Copyright © 2010 Pearson Addison-Wesley. All rights reserved. Chapter 16 Money Creation, the Demand for Money, and Monetary Policy.
Chapter 21 Money and Central Banking Introduction to Economics (Combined Version) 5th Edition.
Copyright © 2002 Pearson Education, Inc. Slide 17-1 The Money Supply Process.
McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 17 The Central Bank Balance Sheet and the Money Supply.
Money and Money Market Money The Quantity Theory of Money
Chapter 5 Policy Makers and the Money Supply © 2000 John Wiley & Sons, Inc.
Review of the Previous Lecture Residential Investment Inventory Investment –Seasonal Fluctuations and Production Smoothing –Accelerator Model of Inventories.
Multiple Deposit Creation and the Money Supply Process
Macroeconomics fifth edition N. Gregory Mankiw PowerPoint ® Slides by Ron Cronovich macro © 2004 Worth Publishers, all rights reserved CHAPTER EIGHTEEN.
CHAPTER 30 Money, Banking, and the Federal Reserve System PowerPoint® Slides by Can Erbil © 2005 Worth Publishers, all rights reserved.
TM 13-1 Copyright © 1998 Addison Wesley Longman, Inc. What is Money? Money is any commodity or token that is generally acceptable as the means of payment.
5-1 Lecture 5 Multiple Deposit Creation and the Money Supply Chapter 15 pages and Chapter 16 pages
© OnlineTexts.com p. 1 Chapter 14 Econ104 Parks Money and Banking.
Monetary Policy Tools Chapter 16 Section 3Chapter 16 Section 3.
Chapter 13 Multiple Deposit Creation and the Money Supply Process.
Chapter 14 The Fed, Money, and Credit. Money stock determination: the components M=CU+D; The currency-deposit ratio: cu=CU/D; The reserve-deposit ratio:
CHAPTER 10 ECONOMICS, MR. VIOLANTI Money, Banking, and the Federal Reserve System.
Deposit Creation and the Money Supply Process – Part I Chapter 13.
The Monetary System What is money? What are its main functions? Money is a commodity that is generally accepted as for payment for goods and services.
The Federal Reserve System and the Money Supply Process
TM 13-1 Copyright © 1998 Addison Wesley Longman, Inc. What is Money? Money is any commodity or token that is generally acceptable as the means of payment.
Chapter 15: The Money Supply Process and the Money Multipliers.
How does a change in money supply affect the economy? Relevant reading: Ch 13 Monetary policy.
Chapter 13 The Demand for Money. Components of the money stock Currency: coins and notes in circulation; Demand deposits: checking accounts and traveler’s.
Chapter 10 Appendix The Fed’s Balance Sheet and the Monetary Base.
Policy #13: Banking 1.Taxing, spending, and borrowing is monetary policy. 2.Trading a Coke for a Sprite is also called bartering. 3.Cutting taxes on the.
Copyright © 2002 Pearson Education, Inc. Slide 17-1.
McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 12 Depository Institutions: Banks and Bank Management.
Players in the Money Supply Process
AP Macroeconomics The Money Market. The market where the Fed and the users of money interact thus determining the short- term nominal interest rate (i%).
Money and Banking Lecture 33. Review of the Previous Lecture Central Bank Roles Objectives Inflation Growth Financial System Interest rate and exchange.
Equilibrium Income Keynesian Approach: AE d determines Y (income/output) produced Can there be limitations to this link? YES because interest rates and/or.
Defining the Money Supply
THE FINANCIAL SECTOR AND THE DEMAND FOR MONEY
The Nature and Creation of Money
The Central Bank Balance Sheet and the Money Supply Process
Depository Institutions: Banks and Bank Management
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Section 5.
Multiple Deposit Creation and the Money Supply Process
Multiple Deposit Creation and the Money Supply Process
Multiple Deposit Creation and the Money Supply Process
Multiple Deposit Creation and the Money Supply Process
The Nature and Creation of Money
Presentation transcript:

Chapter Six The Demand for Money 1. Monetary Aggregates Components of the Money Stock M 0 －－－ Currency in Circulation M 1 －－－ M 1 －－－ M 2 －－－ M 2 －－－ M 3 －－－ M 3 －－－ L －－－ L －－－

2. The Functions of Money means of payments or medium of means of payments or medium of exchange; exchange; store of value; store of value; unit of account; unit of account; standard of deferred payment; standard of deferred payment; international money international money

3. Demand for Money: Theory The transactions motive The transactions motive is the demand for money arising from is the demand for money arising from the use of money in making regular the use of money in making regular payments. payments. The Inventory Approach The Inventory Approach Square-root Formula or Square-root Formula or Baumol-Tobin Model. Baumol-Tobin Model.

The Precautionary Motive The Precautionary Motive is the demand for money to meet is the demand for money to meet unforeseen contingencies. unforeseen contingencies. The Speculative motive The Speculative motive arises from uncertainties about the money arises from uncertainties about the money value of other assets that an individual value of other assets that an individual can hold. can hold.

4. Empirical Evidence Elasticity of real M1 money demand Elasticity of real M1 money demand Elasticity of real M2 money demand Elasticity of real M2 money demand 5. The Income Velocity of Money and the Quantity Theory Quantity Theory

Chapter Seven The Fed,Money,and Credit 1. Money stock determination: Public: The currency-deposit ratio The currency-deposit ratio Business bank: The reserve-deposit ratio The reserve-deposit ratio The central bank High-powered money High-powered money

2. Money multiplier Currency Reserves Deposits

Money multiplier A numerical example: A numerical example:

3. The Instruments of Monetary Control Open Market Operation The Fed Balance Sheet Foreign Exchange and the Base Loans and Discounts The Treasury and the Fed Financing Federal Deficits

The balance sheet for central bank （ U.S) Assets (sources) Liabilities (uses) Assets (sources) Liabilities (uses) Gold & FX Currency Gold & FX Currency Credit Held by public Credit Held by public Loans and discount Vault cash Loans and discount Vault cash Govt. securities Bank deposits Govt. securities Bank deposits Net other credit Net other liabilities Net other credit Net other liabilities Monetary base Monetary base Monetary base Monetary base (sources) (uses) (sources) (uses)

Feedback: Privacy Policy Feedback
Do Not Sell My Personal Information
About project: SlidePlayer Terms of Service

© 2024 SlidePlayer.com Inc. All rights reserved.