MBB4

2. Money, Banking,
and Business
Lecture 4
Money and it Role
in the Economy

3. Questions?

4. What is Money?
Trust

6. If money loses trust
It loses its value

7. What is Money?
Medium of Exchange
Store ofValue
Unit of Account

8. Medium of Exchange
Buyers give to sellers
Sellers accept from
buyers

9. Unit of Account
Measurement
Prices
Debt

10. Store of Value
Trading time for time
Today for tomorrow
Tomorrow for today
Earn - Save - Spend

11. Monetary Aggregates
Measuring Money
M1
M2
other Ms

12. M1
Currency in pockets
and checkable
deposits

13. Checkable Deposits
Demand Deposits
(no interest)
Other Deposits

14. Are checks money?
No
Instructions to transfer
ownership

15. Are credit cards money?
No
Payment System

16. Are debit cards money?
No
Transfer System

17. Point of Sale Terminal

18. Wireless Payments

19. Stored-Value
Cards

20. Chips vs. Magnetic Stripe

21. Financial
Innovations