money

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Updated Dec 2025

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powerpoint presentation money look for the answers to these questions: 2 2 what assets are considered “money”? what are the functions of money? the types of money? what is central bank? what role do banks play in the monetary system? how do banks “create money”? how does the central bank control the money supply? the connection between money and prices inflation rate = the percentage increase in the average level of prices. price = amount of money required to buy a good. because prices are defined in terms of money, we need to consider the nature of money, the supply of money, and how it is controlled. slide 3 3 what money is and why it’s important 4 “double coincidence of wants” simply means that two people have to want each other’s stuff. students find the following example amusing: i’m an economics professor, but i’m a consumer, too. suppose i …

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from econ1 class discussion question which of these are money? a. currency b. checks c. deposits in checking accounts (called demand deposits) d. credit cards e. certificates of deposit (called time deposits) slide 7 7 answers: a - yes b - no, not the checks themselves, but the funds in checking accounts are money. c - yes (see b) d - no, credit cards are a means of deferring payment. e - cds are a store of value, and they are measured in money units (“hey, i just bought a $1000 cd, dude!”). they are not readily spendable, though. the money supply the money supply (or money stock): quantity of money available in the economy currency: paper bills and coins in the hands of the (non-bank) public demand deposits: balances in bank accounts that depositors can access on demand by writing a check 8 what assets should be considered part …

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arge time deposits (those over $100,000 and therefore not cberally insured) are less liquid than small time deposits central banks & monetary policy 10 10 central bank: institution that oversees the banking system and regulates the money supply monetary policy: setting of the money supply by policymakers in the central the central bank of the uzbekistan the central bank monetary policy is conducted by a country’s central bank. 1991-1992 years became a turning period of banking operation. 1995 year was characterized by improvement of banking legal system. slide 11 11 again, this is mostly review. definitions of money supply 1) broad money (m2) is calculated based on positions of liabilities of central bank and other depository corporations (commercial banks), in accordance with the concepts and definitions of the monetary and financial statistics manual and compilation guide, imf 2016 (mfsmcg 2016). m2 includes cash in circulation (outside banking system), transferable, saving …

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hen, slide 16 where p = price of output (gdp deflator) y = quantity of output (real gdp) p y = value of output (nominal gdp) 16 difference is that transactions includes purchase of intermediates as well as final goods. but are highly correlated. the quantity equation the quantity equation m v = p y follows from the preceding definition of velocity. it is an identity: it holds by definition of the variables. slide 17 17 money demand and the quantity equation slide 18 18 m/p = real money balances, the purchasing power of the money supply. a simple money demand function: (m/p )d = k y where k = how much money people wish to hold for each dollar of income. (k is exogenous) money demand and the quantity equation slide 19 19 money demand: (m/p )d = k y quantity equation: m v = p y the connection …

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$(all of which we take as given, for now). slide 25 hence, the quantity theory of money predicts a one-for-one relation between changes in the money growth rate and changes in the inflation rate. 25 note: the theory doesn’t predict that the inflation rate will equal the money growth rate. it *does* predict that a change in the money growth rate will cause an equal change in the inflation rate. bank reserves 26 segue from last slide: the cb controls the money supply and regulates banks. banks clearly play an important role in the money supply because bank deposits are part of the money supply (recall that m1 includes checking account deposits, and m2 also includes savings account deposits). in the interests of parsimony, i have combined the definitions of “fractional reserve banking system” and “reserves,” as shown in the first bullet point. i believe it is sufficient to convey …$

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powerpoint presentation money look for the answers to these questions: 2 2 what assets are considered “money”? what are the functions of money? the types of money? what is central bank? what role do banks play in the monetary system? how do banks “create money”? how does the central bank control the money supply? the connection between money and prices inflation rate = the percentage increase in the average level of prices. price = amount of money required to buy a good. because prices are defined in terms of money, we need to consider the nature of money, the supply of money, and how it is controlled. slide 3 3 what money is and why it’s important 4 “double coincidence …

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