ECN 204 Chapter 14: Chapter 14 ECN 204

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Medium of exchange: items seller generally accept and buyers generally use to pay for a good or service. Measure of value: measures value of money. Stores of value: able to use in stores to buy good/services. Liquidity: the ease with which an asset can be converted to cash with little or no loss of purchasing power. Currency: coins and paper money: token money, bank of canada notes. Demand deposits: chequing account deposits in chartered banks: money m1+= currency in circulation + demand deposits. M2: deposits at trust and mortgage loan companies, deposits at caisses populaires, credit unions and other non-bank deposit taking institutions money market mutual funds. M2+: m2++ is m2 plus canadian saving bonds and non-money market mutual funds. In canada all money consists essentially of the debts of the government and charted banks. These debts efficiently perform the functions of money so long as their value, or purchasing power, is relatively stable.

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