The Monetary System, Money Growth and Inflation

Money is the set of assets in an economy that people regularly use to buy goods and services from other people.

Functions of money

Units of Account

Store of value

Medium of exchange

Buyers give to sellers when they want to purchase goods and service

To post price and record debts

To transfer purchasing power from the present to the future

Kind of money

Commodity money

Fiat Money

Golds, silver, cigarettes

Coins, currency, check deposits

Bank Negara Malaysia

Central bank for Malaysia

Objectives BNM

To issue currency and keep reserve safeguarding the value of the currency

To promote monetary stability adviser to the government

To promote monetary stability and a sound financial structure

To influence the credit situation to the advantage of the country