MGEA06H3 Lecture Notes - Lecture 1: Fractional-Reserve Banking, Bank Reserves, Reserve Requirement

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MGEA06H3 Full Course Notes
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MGEA06H3 Full Course Notes
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Chapter 14 money, banking, and the central banking system (pages 453. The meaning of money: in economics, money does not mean wealth . M1 currency in circulation (cash) + demand deposits and other chequing deposits at chartered banks. M2 m1 plus chartered bank personal term deposits and non-personal demand and notice deposits in chartered banks. M3 m2 plus bank non-personal term deposits and chartered bank foreign currency deposits of residents. Note: a monetary aggregate with a + sign include deposits at chartered banks plus the same type(s) of deposits at trust companies, mortgage and loan companies, credit unions, and caisses populaires. 1 an asset is said to be liquid if it can easily be converted into cash. Roles of money: money performs the following functions, medium of exchange an asset that people use to trade for goods and services rather than for their own consumption.

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