RSM100Y1 Study Guide - Final Guide: Canada Deposit Insurance Corporation, Global Financial System, Leveraged Buyout
Document Summary
Other notes and questions on ppt or raw notes . Learning objectives: outline the structure and importance of the financial system. Funds being transferred between those who have excess funds (savers) and those who need additional funds (users). > savers: earn rate of return in exchange for the use of their funds. > the financial system is made up of: financial institutions (1st way of fund transfer, financial instruments (securities, financial market (2nd way of fund transfer, explain what money is and how its value is determined. > anything that is generally accepted as payment. > characteristics of a good money system: portability, divisibility, stability, durability, uniqueness. > high supply of money will drive up prices (inflation) Currency in circulation (total currency - cash on hand) + bank deposits (saving accounts) Supply of money high --> things cost you more --> price rise (law of supply and demand) M1 readily expansible money: only chequing, not include saving.
