ECON 2305 Lecture23Outline of Last Lecture I. Investment II. InflationOutline of Current LectureI. Money Current LectureMoneyAnything that is readily acceptable as payment for goods and services. Prison moneyCigarettesMackerel TinsHoney bunsFunctions of MoneyMedium of exchangeUnit of accountingStore valueStandard of deferred paymentEvolution of PaymentsBarterUniversal acceptance Currency CheckingElectronicWhat gives money its value?Widespread acceptanceConfidence No intrinsic value Financial Intermediaries:BanksCredit Unions Savings & Loans Institutions These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Insurance Companies What do they do?Bring borrowers & savers together Banking System:Dual regulation system Fractional reserve system A system in which depository institutions hold reserves that are less than the amount of total deposits. Can a bank create money?Yes – by lending money What is the goal of the bank? Make a profit – capitalist
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