1. The document discusses the role of money in the economy, including facilitating economic activity and encouraging growth. It also covers basic money concepts, theories of money such as the quantity theory, and the money creation process. 2. Key points include that money serves as a medium of exchange, store of value, and unit of account. The quantity theory of money states that changes in the money supply will cause equal changes in price levels. Commercial banks can create money through lending, with required reserve ratios determining how much new money can be created. 3. The development of the money supply in Indonesia from 1990-2009 is described, with M1 consisting of currency and demand deposits, and M2 being the sum of

1. Financial
Economics
and
Banking
Universitas Putera Batam

2. The role of money in the economy
General Competencies
Students are expected to be able to explain basic concepts
regarding money, various perspectives on money theory, the
relationships between variables in determining the balance in the
market, current issues from a theoretical and empirical
perspective.
Subject:
Basic Concepts About Money
The Importance of Money for Economists
Money Quantity Theory
Money Creation Process
Motivation to Hold Money
The Development of the Money Supply in Indonesia

3. Kompetensi Umum
1. Mahasiswa diharapkan mampu dan menjelaskan konsep dasar mengenai uang, beba
gai perspektif teori uang, keterkaitan antar variabel dalam penentuan keseimbangan
di pasar, isu terkini dalam perspektif teori dan empiris.
Pokok bahasan
1. Konsep Dasar Mengenai Uang
2. Pentingnya Uang bagi Pelaku Ekonom
3. Teori Kuantitas Uang
4. Proses Penciptaan Uang
5. Motivasi Memegang Uang
6. Perkembangan Uang Beredar di Indonesia
Peranan uang dalam perekonomian

4. Peranan Uang
Dalam
Perekonomian
Money can play a role in facilitating economic
activity, so that it can encourage the creation
of an increase in economic growth
The more the economic activities of a country
develop, of course the financial transactions
that occur are also increasing
Money is one of the important media that can
be used to move the wheels of the economy
Form of Money: Commodity Money and Fiat
Money

5. The definition of money refers to the
function and role of money in a
developing economy
– 1. Base money (central bank of money or high-powered money) is
defined as deposits at the central bank plus notes and coins
– 2. Narrow money In the simplest definition, money is goods that
can be used directly as a medium of payment for transaction
activities.
– 3. Broad money ". . . the sum of currency in the hands of the public
plus all of the public's deposits in commercial banks . . ." As Storage
Media

6. MONEY BASIC CONCEPT
According to the definition of money, then there are several
conditions that must be fulfilled:
Accepted Generally (Acceptability)
1. If money is not accepted by the society then it is i
mpossible to use it as a medium of exchange
2. Having a stable value (Stability Of Value) It takes effort
to maintain the value of money in order to remain stable or
fluctuate a little, because if not people will store their
wealth in the form of goods whose value is stable
3. Amount in Circulation Sufficient for Needs (Elastycity
Of Supply) the inability to supply money to keep pace with
the economy will result in trade stalling and exchanges
being carried out just like in a barter economy
This Photo by Unknown author is licensed under CC BY-SA.

7. Lanjutan...
Mudah Dibawa (Portability)Uang harus mudah diba
wa, bahkan untuk transaksi dalam jumlah besar dap
at dilakukan dengan jumlah uang yang sedikit denga
n cara nilai nominal uang yang besar.
Terjaga Nilai Fisiknya (Durability)Nilai fisik uang haru
s dijaga karena kalau tidak (misal rusak ataupun rob
ek) akan menyebabkan penurunan nilainya

8. Role or function of money
Means of Exchange With the presence of money the transaction process will run smoothly, people no longer
feel the difficulties of the barter transaction model
Measure Of Value Money is used as a tool that can show the value of goods and services being traded, the
amount of people's wealth
Standard For Deferred Payments Money also functions for installments or debt payments
Tools for Hoarding Wealth Or Purchasing Power (Store Of Value) By saving money means someone is
hoarding wealth in the form of money, this is done to facilitate transactions at this time or in the future

9. 1. In another view, according to Handa (2009), money
is a medium that has several functions, including:
medium of exchange/payments; store of value,
sometimes specified as a temporary store of value or
temporary abode of purchasing power; standard of
deferred payments ; units of accounts.
2. In relation to the function of money as a medium of
exchange, money must meet several basic criteria,
namely: it must be easy to standardize; must be
generally accepted; must be easy to change; must be
easy to carry; does not decrease in value in a short
time.
This Photo by Unknown Author is licensed under CC BY

10. The quantity equation is an identity: the definitions of the four variables make it true. If one variable changes, one or
more of the others must also change to maintain identity. The quantity equation we are using from now on is the
money supply (M) times the turnover of the transaction money (V) which is equal to the price (P) times the number of
transactions (T):
Uang  Perputaran = Harga  Transaksi
M  V = P  T
V in the quantity equation is called the transaction velocity of money. It states the number of times the money
changes hands in a given period of time.

11. The view of the Quantity Theory of money can be summarized as follows:
Changes in the money supply (M) will cause an equal change in prices (P) and changes in both
variables are in the same direction.
Assumptions and views of Quantity Theory:
The rate of circulation of money (V) is constant.
Full employment opportunities are always achieved in the economy.

12. In other words, if Y is constant (from Chapter 3) because it depends on the growth of the factors of production and
technological progress, and we have made the assumption that turnover is constant,
or in the form of percentage change:
MV = PY
% perubahan M + % perubahan V = % perubahan P + % perubahan Y
If V and Y are constant, it means that the % change in M ​​causes the % change in P.
The quantity theory of money holds that the central bank, which controls the money supply, has ultimate
control over the rate of inflation. If the central bank keeps the money supply stable, the price level will
stabilize. If the central bank increases the money supply rapidly, the price level will increase rapidly.

13. Transactions and output are closely related, because more and more
the economy produces, the more goods are bought and sold.
If Y represents the quantity of output and P represents the price of one
unit
output, then the money value of the output is PY. We have discussed
the size of these variables when we discuss income items
national.
Uang  Perputaran = Harga  Output
M  V = P  Y
This version of the quantity equation is called the revenue velocity
(income velocity of money), which states how many times money
into a person's income within a certain period of time.

14. – The Quantity Theory of Money : MxV=PxQ, or MxV=PxPDB
– In the equation M=C+D, if there is no bank, then the amount of
money supply (M) is equal to currency(C).
– Motivation to hold money: speculation, transactions, just in case
– The development of the money supply shows an increasing trend
in financial volumes in Indonesia during the period 1990–2009.
Money in the M1 sense includes the circulation of banknotes and
coins as well as demand deposits. M2 is M1 plus quasi money. The
amount of M1 until 2009 was recorded at Rp515,824 million. In
the same year, the amount of quasi money in Indonesia reached
Rp1,625,559 million, while the development in M2 was greater
because it was the sum of the M1 and quasi money components.
This Photo by Unknown author is licensed under CC BY.

15. Proses penciptaan uang
Aset Liabilitas
Dana Cadangan Rp 1.000 Dana Simipanan Rp 1.000
Jika reserves sebesar 100 %, maka sistem perbankan
tidak memiliki dampak
terhadap penambahan uang beredar (money supply)

16. Savings Demand Deposits or Current Accounts
created by commercial banks can be divided into
two types:
Main Demand Deposit Savings: When a general bank
receives money from its customers in the form of cash
or checks withdrawn from another bank.
Derivative demand deposits, when the bank
provides loans to its customers.

17. APPLICABLE MONEY CREATION
PROCESS
Rasio cadangan yang ditetapkan ad
alah 20%
Semua kelebihan cadangan akan di
pinjamkan oleh setiap bank umum
kepada langganannya.
Transaksi –
transaksi selalu dibayar dengan me
nggunakan cek.
Seluruh tabungan yang dimasukkan
ke dalam setiap bank umum adalah
merupakan tabungan giral.

18. Task
Apa peranan uang dalam perekonomian
Jelaskan Kenapa muncul istilah near money dan brand money
Jelaskan Peranan bank central dalam pengendalian peredaran uang dalam perekonomian
Jelaskan Proses penciptaan uang
Jelaskan Bagaimana teori kuantitas uang dapat menjelaskan kondisi perekonomian
Jelaskan Perkembangan dalam besaran uang

19. UPB