ECON 1101 Chapter Notes - Chapter 9: Core Inflation, Quantitative Easing, Money Creation

• School: Dalhousie University
• Department: Economics
• Course: ECON 1101
• Professor: T.Cyrus

Document Summary

Chapter 9: central banking, commercial banking, and money. Functions of money: medium of exchange: an asset used in purchasing goods and services. The alternative would be barter, an exchange of goods, but barter requires a double coincidence of wants: store of value: an asset that serves as a means of holding wealth. Money can be used to transport purchasing power from one time period to another. Other ways to store value: bonds, stocks, real estate, gold, antiques, and paintings. Disadvantage of holding money: its value falls over time due to inflation. Advantage of holding money: it is liquid portable and readily accepted: unit of account: a basic measure of economic value. Money is a standard way of quoting prices. Items used as money: coloured pieces of paper (modern society, cigarettes (prisoners of war during wwii, huge carved stones (island of yap in the south pacific, woodpecker scalps or beads (native tribes in the past)