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Money
Means of Payment
Money has three other functions
Medium of Exchange
Unit of Account
Store of Value
Currency
Deposits
Fiat Money
M1 Measure of Money
M2 Measure of Money
Liquidity
The banking system consists of private and public institutions that
The Banking System consists of two institutions that play a crucial role in financial markets
Depository Institution
Reserves
Liquid Assets
Securities
Loans
Economic benefits provided by Depository Institutions
Create Money
Pool Risk
Lower the Cost of Borrowing
Lower the Cost of Monitoring Borrowers
The Bank of Canada
Central Bank
The Bank of Canada's Functions are
Lender of Last Resort
Sole Issuer of Bank Notes
Changes to the Bank of Canada's balance sheet alter the ______, which is one step in the money creation process
The Bank of Canada’s assets are
The Bank of Canada's liabilities are
Monetary Base
Open Market Operation
Money is created by
Desired Reserve Ratio
Excess Reserves
Currency Drain Ratio
8 steps in money creation
Money Multiplier
The quantity of money that people plan to hold depends on 4 factors
The Price Level
Nominal Money
Real Money
The Nominal Interest Rate
Real GDP
Financial Innovation
Demand for Money
A rise in the interest rate brings a _____ in the quantity of real money demanded
A fall in the interest rate beings an ______ in the quantity of real money demanded
if there is a decrease in real GDP or a financial innovation, there is a _________ shift in the demand for money
if there is an increase in real GDP, there is a _________ shift in the demand for money
Supply of Money
Money Market Equilibrium
Money Market Equilibrium determines
Short-Run Equilibrium
Long-Run Equilibrium
Quantity Theory of Money
Velocity of Circulation
Quantity Theory of Money Equation
Velocity of Circulation Equation
Equation of Exchange
The equation of exchange becomes the quantity theory of money if M does not influence V or Y
the equation of exchange in growth rates
In the long run, velocity does not change, so
