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Money, Banking,
and Business
Lecture 4
Money and it Role
in the Economy
Questions?
What is Money?
Trust
If money loses trust
It loses its value
What is Money?
Medium of Exchange
Store ofValue
Unit of Account
Medium of Exchange
Buyers give to sellers
Sellers accept from
buyers
Unit of Account
Measurement
Prices
Debt
Store of Value
Trading time for time
Today for tomorrow
Tomorrow for today
Earn - Save - Spend
Monetary Aggregates
Measuring Money
M1
M2
other Ms
M1
Currency in pockets
and checkable
deposits
Checkable Deposits
Demand Deposits
(no interest)
Other Deposits
Are checks money?
No
Instructions to transfer
ownership
Are credit cards money?
No
Payment System
Are debit cards money?
No
Transfer System
Point of Sale Terminal
Wireless Payments
Stored-Value
Cards
Chips vs. Magnetic Stripe
Financial
Innovations
Mbb4
Mbb4
Mbb4

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