MGTA02H3 Chapter Notes - Chapter 18: International Monetary Fund, Ecash, Cheque Clearing
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MGTA02H3 Full Course Notes
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What is money: money: any object generally accepted by people as payment for goods and services (usually stamped metal or printed paper; but can also include commodities, ex. The characteristics of money: portability: modern currency is lightweight and easy to handle, divisibility: modern currency is easily divisible into smaller parts with fixed values for each unit (ex. Value of fish rises and falls with the fishing season) M1 plus the convertible money supply: m-2: m-2: everything in m-1plus savings deposits, time deposits, and money market mutual funds (accounts for nearly all of the nation"s money supply > in 2003 it equaled . 1 billion) Credit cards: plastic money: not included in m-1 or m-2, credit cards are a substitute of money, not a store of value. Some cards charge annual fees, all charge interest on unpaid balances (around 11-20%: merchants who accept credit cards pay fees to card issuers (about 2-5% of total credit- sales)
