MGEA06H3 Chapter Notes - Chapter 14: Commodity Money, Credit Union, Monetary Base
14 Apr 2016
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MGEA06H3 Full Course Notes
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Chapter 14) money, banking and the central banking system. Money - any asset that can easily be used to purchase goods and services. Sometime store accepts cheque on bank account, this action does helps the bank to earn money because : Currency in circulation-actual cash in the hands of the public (is considered money) Chequeable deposits- bank accounts on which people can write cheques. Money supply- the total value of financial assets in the economy that are considered money. Narrow definitions consider only the most liquid assets to be money: currency in circulation and chequable deposits. The broader definition includes other assets that are almost chequable: saving account, trust and mortgage loan, credit unions and caisses populaires. Money plays a crucial role in generating gain from trade because it make indirect exchange possible. Ex) a surgeon offer heart operation, and a store owner offers a refrigerator.
