ECN 204 Chapter 12: ECN 204 Chapter 12 Notes.docx
Document Summary
Money is any item that is generally accepted to sellers in exchange for goods and services. Items sellers generally accept and buyers generally use to pay for a good or service: as a medium of exchange, money allows society to escape the complications of barter. Measure of value: money is also a measure of value, or, more formally, a unit of account. Money definition: m1: m1 is currency (coins and paper money) and demand deposits in chartered banks. It consist of two items: (a) currency (coins and paper money) outside chartered banks, and (b) all demand deposits, meaning chequing account deposits in chartered banks: currency: coins + paper money: all coins in circulation in canada are token money. This means the value of the metal contained in the coin itself is less than the face value of the coin. paper money and coins constitute about 24% percent of the economies.
