ECN 204 Lecture Notes - Lecture 8: Financial Intermediary, Token Money, Fractional-Reserve Banking
11 Apr 2017
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14. 10- define the monetary multiplier, explain how to calculate it, and demonstrate its relevance. Liquidity: the ease with which an asset can be converted to cash with little or no loss of purchasing power. Currency: coins + paper money: token money, bank of canada notes. Demand deposits: about of m1. Institutions that offer demand deposits: chartered banks are the primary depository institutions. M1 + near-monies: near monies are highly liquid financial assets that do not directly function as a medium of exchange but can be readily converted into currency. E. g. currency or funds in nonchequable savings accounts: term deposits become available to a depositor only at maturity. M2: deposits at trust and mortgage loan companies, deposits at caisses populaires, credit unions and other non-bank deposit-taking institutions, money market mutual funds. M2+: m2++ is m2 plus canadian saving bonds and non-money market mutual funds.
