13 - 1 Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking.

Slides:

Advertisements

Similar presentations

Unit 4: Money and Monetary Policy

Advertisements

Money and Banking Chapter 31 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Money and Monetary Policy

Learning Objectives Explain what money is.

The Federal Reserve System Chapter 14 Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART Understanding Financial Issues.

Unit 4: Money and Monetary Policy

PART SIX Money, Banking, and Monetary Policy. Chapter 15: Money and Banking Copyright © 2007 by the McGraw-Hill Companies, Inc. All rights reserved.

31 Money, Banking, and Financial Institutions McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Alomar_111_191 Money and Banking Chapter 13 Money and Banking.

The Money Supply Process and Banks

16 The Monetary System.

Money & Banking Chapter 13. Functions Medium of Exchange – Used in the buying and selling of goods Medium of Exchange – Used in the buying and selling.

What is Money Ch 13.

6/12/20141 Money and Banking Chapter Outline The Functions of Money The Functions of Money The Components of Money Supply The Components of Money.

Money and Banking Chapter 13.

“If you think nobody cares if you’re alive, try missing a couple of car payments.” Earl Wilson US Representative Money and Banking.

The Money Market and the Loanable Funds Market 1.

33 Interest Rates and Monetary Policy McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Unit 4: Money and Monetary Policy

10/22/20141 Money and Banking Chapter Outline The Functions of Money The Functions of Money The Components of Money Supply The Components of Money.

Financial Sector Review Questions

14 Money, Banking, and Financial Institutions McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Medium of exchange: Money can be exchanged for goods and services.

Money and Banking Chapter 14 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

PART SIX Money, Banking, and Monetary Policy. Chapter 15: Money and Banking Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.

Macroeconomics - ECO 2013 Fall 205 – 1 Term August 24 – December 16, 2005.

Money and Monetary Policy 1 FUNCTIONS OF MONEY Medium of Exchange Buying goods and services Unit of Account Prices are quoted in dollars and cents Store.

Money Supply and other notions about Money! Amount of money in circulation is constantly changing. The amount depends on how much money is desired by.

UNIVERSAL COLLEGE OF ENGINEERING & TECHNOLOGY SUBJECT-

Money and Banking— Monetary Policy Chapter 13. Functions of Money  1. Medium of exchange—used for buying and selling g & s  2. Unit of account—prices.

13 C H A P T E R Examples of Money Cattle, cigarettes, shells, stones, gold, pepper, wampum, and even beer as money So what is Money? Money is anything.

© 2005 McGraw-Hill Ryerson Ltd. Macroeconomics, Chapter 11 1 Money and Banking SLIDES PREPARED BY JUDITH SKUCE, GEORGIAN COLLEGE.

Copyright McGraw-Hill/Irwin, 2002 Goals of Monetary Policy Consolidated Balance Sheet of the Federal Reserve Banks Tools of Monetary Policy Federal.

Money, Banking, and Financial Institutions 14 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Money and Banking Chapter 31 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Engineering Economics & management..  MONEY & BANKING Prepared by:- Krupa dave ( ) Manju chufal( )

Money and Banking Chapter 31 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

33 Monetary Policy McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. 15.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Macroeconomics 7/e by Jackson and McIver Slides prepared by Muni Perumal, University of Canberra,

Copyright 2008 The McGraw-Hill Companies 12-1 Money Defined Money Supply Federal Reserve System Financial Institutions Last Word Key Terms End Show 12.

1 Bond Market and Money Market Ch What Backs the money supply? Govt’s ability to keep its value stable provides backing Money is debt; paper money.

1 of 32 © 2014 Pearson Education, Inc. CHAPTER OUTLINE 10 - Part 2 The Federal Reserve System Functions of the Federal Reserve Expanded Fed Activities.

16 Interest Rates and Monetary Policy McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

1 Money, Banking & Interest Rate Lecture 7 BECON2101 Shan Faculty of Business Management & Globalization Tel: Ext. 8407

Chapter 14 Presentation 1- Monetary Policy. Ways the Fed Controls the Money Supply 1. Open Market Operations (**Most used) 2. Changing the Reserve Ratio.

Money, Banking, and Central Banking. Copyright © 2008 Pearson Addison Wesley. All rights reserved Introduction Why is the Federal Reserve System.

1 The Fed Ch The Federal Reserve and the Banking System The Fed was est. by Congress in 1913 and holds power over the money and banking system.

Copyright McGraw-Hill, Inc Money & Banking FUNCTIONS OF MONEY SUPPLY OF MONEY DEMAND FOR MONEY MONEY MARKET U.S. FINANCIAL SYSTEM CHAPTER THIRTEEN.

18 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Interest Rates and Monetary Policy 18.

Money and Banking 31,32,33 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

The Evolution and Transformation of Money Basic Kinds of Economic Interaction Gifts -- Transfer of value without any particular expectation of anything.

MONEY AND BANKING Pertemuan 10 Matakuliah: J0594-Teori Ekonomi Tahun: 2009.

Functions of Money Medium of exchange: Money can be used to buying and selling goods and services. Unit of account: Prices are quoted in dollars and cents.

McGraw-Hill/Irwin Chapter 17: Interest Rates and Monetary Policy Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

The Demand and Supply of Money SmSm i% $$ demanded DmDm i% 1.

Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Macroeconomics by Jackson and McIver Slides prepared by Muni Perumal 9-1 Chapter 9 Money, banking.

14a – What is Money? This web quiz may appear as two pages on tablets and laptops. I recommend that you view it as one page by clicking on the open book.

Money, Banking, and Financial Institutions

Chapter 31 Money and Banking.

Chapter 31 Money and Banking McGraw-Hill/Irwin

13 C H A P T E R Money and Banking.

Money/Banking/Fed.

13 C H A P T E R Money and Banking.

Money, Banking, and Financial Institutions

10 C H A P T E R Money and Banking.

13 C H A P T E R Money and Banking.

The Demand and Supply of Money

The Federal Reserve and Monetary Policy

Chapter 13 – Money & Banking

Presentation transcript:

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show 13 C H A P T E R Money and Banking

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show FUNCTIONS OF MONEY Medium of Exchange Unit of Account Store of Value

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show MONEY SUPPLY Currency Token Money Federal Reserve Notes Little Intrinsic Value Checkable Deposits Commercial Banks Thrift Institutions Definition…

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show MONEY SUPPLY = Plus... Near-monies Savings Deposits Money Market Deposit Accounts (MMDAs) Smaller Time Deposits Money Market Mutual Funds (MMMFs)

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show MONEY SUPPLY = Plus... Large Time Deposits Illustrated…

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show Currency (coins & paper money) plus Checkable deposits equals M1 M1M2M3 $ Data (billions of dollars) MONEY SUPPLY

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show M1M2M3 $ Data (billions of dollars) $5899 MONEY SUPPLY Currency (coins & paper money) plus Checkable deposits equals M1 plus Savings deposits, including MMDAs plus Small time deposits plus Money market mutual fund (MMMF) balances equals M2

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show M1M2M3 $ Data (billions of dollars) $5899 $8595 MONEY SUPPLY Currency (coins & paper money) plus Checkable deposits equals M1 plus Savings deposits, including MMDAs plus Small time deposits plus Money market mutual fund (MMMF) balances equals M2 plus Large time deposits equals M3 Currency (coins & paper money) plus Checkable deposits equals M1 plus Savings deposits, including MMDAs plus Small time deposits plus Money market mutual fund (MMMF) balances equals M2

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show WHAT ABOUT CREDIT CARDS?

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show WHAT BACKS THE MONEY SUPPLY? Money as Debt Value of Money Acceptability Legal Tender Relative Scarcity Money and Prices Purchasing Power of Money D = 1/Price Level Inflation and Acceptability

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show WHAT BACKS THE MONEY SUPPLY? So, What Backs the Money Supply? Stable Value! through... Appropriate Fiscal Policy Intelligent Management of the Money Supply – Monetary Policy

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show THE DEMAND FOR MONEY Transactions Demand, D t varies directly with nominal GDP Asset Demand, D a varies inversely with the interest rate Liquidity Preference illustrated...

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show + Transactions Demand, D t Rate of interest, i (percent) Amount of money demanded (billions of dollars) DtDt THE DEMAND FOR MONEY

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show += Transactions Demand, D t Asset Demand, D a Rate of interest, i (percent) Amount of money demanded (billions of dollars) DtDt THE DEMAND FOR MONEY Rate of interest, i (percent) Amount of money demanded (billions of dollars) DaDa

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show += Transactions Demand, D t Asset Demand, D a Total demand for money, D m Rate of interest, i (percent) Amount of money demanded (billions of dollars) DtDt THE DEMAND FOR MONEY Rate of interest, i (percent) Amount of money demanded (billions of dollars) DaDa Rate of interest, i (percent) Amount of money demanded (billions of dollars) DmDm

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show += Transactions Demand, D t Asset Demand, D a Total demand for money, D m Rate of interest, i (percent) Amount of money demanded (billions of dollars) DtDt THE DEMAND FOR MONEY Rate of interest, i (percent) Amount of money demanded (billions of dollars) DaDa Rate of interest, i (percent) Amount of money demanded (billions of dollars) SmSm Equilibrium Interest Rate ieie Rate of interest, i (percent) Amount of money demanded (billions of dollars) DmDm ADD THE MONEY SUPPLY TO FIND THE EQUILIBRIUM RATE OF INTEREST

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show Rate of interest, i (percent) Amount of money demanded (billions of dollars) DmDm ieie SmSm THE MONEY MARKET Suppose the money supply is decreased from $200 billion, S m, to $150 billion S m1.

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show Rate of interest, i (percent) Amount of money demanded (billions of dollars) DmDm ieie SmSm A temporary shortage of money will require the sale of some assets to meet the need. S m1 THE MONEY MARKET

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show Rate of interest, i (percent) Amount of money demanded (billions of dollars) DmDm ieie SmSm THE MONEY MARKET Suppose the money supply is increased from $200 billion, S m, to $250 billion S m2.

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show Rate of interest, i (percent) Amount of money demanded (billions of dollars) DmDm ieie SmSm S m2 THE MONEY MARKET A temporary surplus of money will require the purchase of some assets to meet the desired level of liquidity.

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show Rate of interest, i (percent) Amount of money demanded (billions of dollars) DmDm ieie SmSm S m2 THE MONEY MARKET A temporary surplus of money will require the purchase of some assets to meet the desired level of liquidity. Bonds are assumed as a typical asset with lower prices associated with higher interest rates

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show Centralization and Public Control Board of Governors Assistance & Advice Federal Open Market Committee (FOMC) The 12 Federal Reserve Banks Central Bank Role Quasi-Public Banks Bankers Banks Commercial Banks & Thrifts THE FEDERAL RESERVE AND THE BANKING SYSTEM

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show THE FEDERAL RESERVE AND THE BANKING SYSTEM Federal Open Market Committee Board of Governors 12 Federal Reserve Banks Commercial Banks Thrift Institutions (Savings & loan associations, mutual savings banks, credit unions) The Public (Households and businesses)

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show FED Functions & the Money Supply Issuing Currency Setting Reserve Requirements & Holding Reserves Lending Money to Banks & Thrifts Discount Rate Providing for Check Collection Acting as Fiscal Agent Supervising Banks Controlling the Money Supply

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show FED Functions & the Money Supply Federal Reserve Independence Recent Developments Relative Decline of Banks and Thrifts Financial Services Industry Consolidation Among Banks and Thrifts Convergence of Services Provided by Financial Institutions Globalization of Financial Markets Electronic Transactions

ENDBACK medium of exchange unit of account store of value M1, M2, M3 token money Federal Reserve Notes checkable deposits commercial banks thrift institutions near-monies savings account money market deposit account (MMDA) time deposits money market mutual fund (MMMF) legal tender transactions demand asset demand total demand for money money market Federal Reserve System Board of Governors Federal Open Market Committee (FOMC) Federal Reserve Banks financial services industry electronic transactions Copyright McGraw-Hill/Irwin, Inc. 2005

Copyright McGraw-Hill/Irwin, 2005 Functions of Money What Backs the Money Supply Demand for Money The Money Market The Federal Reserve & the Banking System FED Functions & the Money Supply Key Terms Previous Slide Next Slide End Show How Banks and Thrifts Create Money Chapter 14 Coming up next...