ECON-1010 Chapter Notes - Chapter 24: Monetary Base, Commodity Money, Money Supply

• School: Vanderbilt University
• Department: Economics
• Course: ECON-1010
• Professor: Hojjatallah Ghandi

Document Summary

Money: anything that is commonly used to buy and sell goods and services. Money"s good or badness is determined by 3 things: Monetary base: the money provided by the federal reserve. Medium of exchange: something that can be used to buy and sell goods and services. Commodity money: something that is used as money that has value other than its use as money. Unit of account: the function of money that determines the relative value of goods and services. We determine the relative prices of things by comparing their values in dollars. Store of value: money is used to preserve wealth over time. Fiat money: a government declares that something is money and the citizens of the country use it as money. Mb (monetary base): currency in circulation + any deposits at the federal. M1: the sum of currency in circulation + checking account deposits.