ECON 1010 Chapter Notes - Chapter 24: Nominal Interest Rate, Open Market Operation, Bank Reserves

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Any commodity or token that is generally acceptable as means of payment. An object that is generally accepted in exchange for goods and services. People would need to exchange goods and services directly in the absence of money. Is an agreed measure for stating the prices of goods and services. Money can be held for a time and later exchanged for goods and services. Notes and coins held by individuals and businesses. Consists of currency held by individuals and businesses plus chequable deposits owned by individuals and businesses: all the items here are means of payment (they are money) Consists of m1 plus all other deposits- non-chequable deposits and fixed term deposits. Some savings deposits here are not means of payments (called liquid assets: liquidity, deposits, credit cards. Property of being instantly convertible into a means of payment with little loss of value. , but cheques are not: a cheque is an instruction to a bank to transfer money.

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