ECON 2035 Lecture Notes - Lecture 1: Federal Reserve System, Money Market Fund, Eurodollar
Document Summary
Econ 2035 what is money: currency paper money (such as dollar bills) and coins [what most people are referring to when they say (cid:498)money(cid:499) too narrow a definition for econo. , wealth total collection of pieces of property that serve to store value. Store of value: store of value a repository of purchasing power over time, used to save purchasing power from time income is received until time it is spent reluctant to hold wealth in this form month fell sharply. Fiat money difficult to counterfeit: because paper currency has evolved into legal arrangement, countries can change the currency they use at will, major drawbacks: easily stolen, expensive to transport in bulk [b/c of bulk] Electronic payment: development of inexpensive computers & spread of internet makes it cheap to pay bills electronically, save money from cost of stamp, requires little effort, can automatically deduct bills from account pays up front account whenever needed. + saving deposits and money market deposit accounts.
