ECON 1100 Chapter Notes - Chapter 10: Open Market Operation, Pras, Cut Bank
31 Mar 2015
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Econ*1100 chap 10: money, banks, and the bank of canada. Occurs when sellers are willing to accept it in exchange for goods/services. Each good having a price in terms of dollars. Found not just in money, but in assets such as stocks, bonds, homes etc. Stocks/bonds offer benefit over money because they may increase in value in the future. Assets like a home have benefit because they provide services i. e. a place to sleep. People hold money because of liquidity, and the fact that selling an asset will likely cause a cost to be incurred. Serves this function through borrowing and lending. Can facilitate exchange at a given point in time by providing a medium of exchange and unit of account. Can facilitate exchange over time by providing store of value and a standard of deferred payment: what can serve as money, five criteria make a good suitable for use as a medium of exchange:
