MGEA06H3 Chapter Notes - Chapter 14: Bank Reserves, Reserve Requirement, Money Supply

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MGEA06H3 Full Course Notes
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MGEA06H3 Full Course Notes
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Money is any asset that can easily be used to purchase goods and services. Currency in circulation and chequeable deposits are both part of the money supply. Commodity money a good used as a medium of exchange that has intrinsic value in other uses: when something has value during that time period. Commodity-backed money medium of exchange with no intrinsic value whose ultimate value is guaranteed by a promise that it can be converted into valuable goods. Monetary aggregate an overall measure of money supply (m1, m1+, m2, m2+, m3) Near-moneys financial assets that can"t be directly used as a medium of exchange but can be readily converted into cash or chequeable deposits. Bank reserves currency banks hold in their vaults plus their deposits at bank of canada. T-account a tool for analyzing a business"s financial position by showing, in a single table, the business"s assets and liabilities. Reserve ratio fraction of bank deposits that a bank holds as reserves.

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