ECON 1950 Lecture Notes - Lecture 6: Debit Card, Time Deposit, Money Supply
Document Summary
Money is anything generally accepted as a medium of exchange. Medium of exchange: means of payment: paper money, coins. Unit of account: all prices are expressed in terms of $ You can compare how much each item costs compared to how many dollars you have. This is money because gov"t declares this as money. Demand deposits: money deposited in the current account. The account where one can withdraw money at any time. Debit card, go into bank to withdraw money at any time. M2: m1+ all notice and personal term deposits. All notice---> savings deposits, one has to give notice to withdraw money. Personal term-----> 1 year, 2 year, 5 year, 10 year deposits. You cannot withdraw money before term without penalty. Less liquid than m2 because of the high interest rate. Store of value ---> wealth in the form of money. Unit of account ---> all prices are expressed in $
