ECO 1102 Lecture Notes - Lecture 5: Quantitative Easing, Capital Requirement, Openmarket

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ECO 1102 Full Course Notes
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ECO 1102 Full Course Notes
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Barter system: it did not and cannot work because of the double coincidence of wants trading goods or services, for goods and services. In the absence on money there is fricion in the economy. Deiniion of money: the set of assets in the economy that people regularly use to buy goods and services from other people. The funcions of money: medium of exchange: an item that buyers give to sellers while purchasing goods/services: Dcows/fricion: unit of account: the yardsick people use to post prices and record debts: relaive prices in the absence of money. Store of value: an item that people can use to transfer purchasing power from the present to the future. Wealth: is the total of all stores of value, including both monetary and non-monetary assets. Liquidity: describes the ease with which an asset can be converted into a medium of exchange. Money is the most liquid of assets.

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