ECON102 Lecture 7: ECON 102 Lecture 7 -Money, The Price Level, and Inflation

• School: University of Waterloo
• Department: Economics
• Course: ECON102
• Professor: Maryann Vaughan

Document Summary

Econ102 lecture7 -money, the price level, and inflation. Any commodity or token that is generally acceptable as a means of payment: three functions: Deposits at banks and other depository institutions. Two measures of the money stock for the canadian economy. Money consists of coins, bank notes, and chequable deposits. M1 = currency (bank notes + coins) outside the banks + demand deposits located in chartered banks: demand deposits. Funds in accounts that can be removed without notice and. M2 = m1 + personal saving deposits + term deposits and non-personal notice deposits located in chartered banks: saving deposits. Bank deposits that typically earn a rate of return and require a stipulated amount of notice to be withdrawn, though rarely enforced: notice deposits. Deposits which have a notice requirement in the contractual agreement with the client, although banks almost never enforce this clause: term deposits.