Please enable JavaScript.

Coggle requires JavaScript to display documents.

MacroEconomics (Money, Price level, and Inflation (Money (functions (means…

- - - - transferable
      - easily converted into a means of payment
    - - means of payment
      - medium of indirect exchange
      - store of value
      - unit of account (for Op-cost)
    - - currency
      - deposits
    - - M1
        
        currency, deposits and chequables
      - M2
        
        M1, Non-chequables, Fixed term
    - - influencing factors
        
        price level
        
        real GDP
        
        financial innovation
        
        Interest rate
      - Money demand & supply
    - - Money & Price level
      - velocity of circulation
      - inflation rate
  - - - types
        
        credit unions/caisses populaire
        
        deposits from members
        
        trust and Mortgage loan companies
        
        estates, pensions
        
        Chartered banks
        
        assets
        
        reserves
        
        liquid assets
        
        securities
        
        loans
      - functions
        
        accept deposits and issue loans
      - Benefits
        
        create liquidity
        
        Pool risk
        
        lower borrowing cost (searching cost)
        
        lower monitoring cost
    - - create money
        
        increase reserves
        
        increase loans
        
        increase deposits
        
        limiting factors
        
        size monetary base
        
        desired holdings
        
        currency
        
        reserves
      - manage the monetary system
      - manage the payment system
    - - functions
        
        sets polices (monetary and payment)
        
        supervises (markets and institutions)
      - similarities to banks
        
        loan, deposits, security
      - differences from banks
        
        Bankers bank (Dinst, Gov't)
        
        lender of last restort
        
        issuer of Bank notes
      - activities
        
        monetary base
        
        reserves
        
        coins
        
        bank notes
        
        Open market
        
        Balance sheet