MONETARY ECONOMICS
description
Transcript of MONETARY ECONOMICS
MONETARY ECONOMICSCONCEPTS OF MONEY
Content History and Evolution of Money Monetary SystemsPayment Standards DefinitionFunctions of Money Measurement of Money Supply Discussion Concepts of Money in Islam
From Barter to Money Barter is the exchange of a good or service for another good or service Barter requires a ldquodouble coincidence of wantsrdquo for a transaction to take
place A barter economy has fewer exchanges exchanges that are made are more
time consuming and less specialization is possible The frustrations associated with barter led people to create MONEY Over time may different items have served as money To serve as money an item must be SCARCE and
Portable Durable Divisible
Familiar (Uniform) Acceptable Stable in Value
Various Forms of Money
The use of cattle inexchange can be tracedback as far as 9000-6000 BC
Cowrie shells beingused as money can betraced to China in 1200BC
An Okpoho manilla (orbracelet) was an early form of money in Nigeria
The Katanga Cross was an archaic form ofmoney from WestAfrica
Bronze and copper replicas of shells weremanufactured in China by the end of the Stone Age and the Lydians (modern Turkey) coined gold and silver around 560 BC
Other Forms of Money- Whalersquos teeth- Bread- Spices
On the Micronesian Island of Yap huge limestone rocks wereformed into coins1048710 Some of these coins were 9-12feet in diameter and weighed several tons
Monetary Payment Systems
Barter Economy
Commodity Money
Representative to Gold-backed money
Fiat Money and the Future
Commodity Money item which is useful in its intrinsic value as well as its monetary properties
Began with banks issuing paper receipts to depositors indicating that the receipt is redeemable for the precious goods being stored
Representative money made the practice of fractional reserve banking possible
Paper Currency
This money is not backed by reserves of another commodity
The money is given value by government fiat (Latin for ldquolet it be donerdquo) or decree
Functions of Money Medium of Exchange ndash acts as a go-between to make it easier
to buy and sell goods and services or pay debts Allows buyers and sellers to avoid the difficulties associated with barter exchanges
Store of Value ndash allows people to transfer the purchasing power of their present money income or wealth into the future ideally without a loss of value
Unit of Account ndash serves as a way to measure and compare the value of goods and services in relation to one another It also allows people to keep accurate financial records
Measurement of Money Supply
Measurement of Money Supply-Malaysia
M1currency and demand deposits held by the private
sector
M2 = M1 +savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by the commercial banks]
M3 = M2 + savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by other banks]
Money supply (or Money Stock)ndash The amount of money in an economy that is easily available for use in payments It is not just coins and notes in circulation
First Discussion
Do the official measures of Money Stock (M1 M2 and M3) accurately reflect the quantity of money in the economy
When we state M2 = Currency + Demand Deposits + Savings Deposits + Fixed Deposits + NCD + REPO what does
this mean
Second Discussion
What is the concept of Money in Islam
Must money in an Islamic economy be in the form of gold
Is fiat money incompatible with Islamic principles
- MONETARY ECONOMICS
- Content
- From Barter to Money
- Various Forms of Money
- Monetary Payment Systems
- Functions of Money
- Measurement of Money Supply
- First Discussion
- Second Discussion
-
Content History and Evolution of Money Monetary SystemsPayment Standards DefinitionFunctions of Money Measurement of Money Supply Discussion Concepts of Money in Islam
From Barter to Money Barter is the exchange of a good or service for another good or service Barter requires a ldquodouble coincidence of wantsrdquo for a transaction to take
place A barter economy has fewer exchanges exchanges that are made are more
time consuming and less specialization is possible The frustrations associated with barter led people to create MONEY Over time may different items have served as money To serve as money an item must be SCARCE and
Portable Durable Divisible
Familiar (Uniform) Acceptable Stable in Value
Various Forms of Money
The use of cattle inexchange can be tracedback as far as 9000-6000 BC
Cowrie shells beingused as money can betraced to China in 1200BC
An Okpoho manilla (orbracelet) was an early form of money in Nigeria
The Katanga Cross was an archaic form ofmoney from WestAfrica
Bronze and copper replicas of shells weremanufactured in China by the end of the Stone Age and the Lydians (modern Turkey) coined gold and silver around 560 BC
Other Forms of Money- Whalersquos teeth- Bread- Spices
On the Micronesian Island of Yap huge limestone rocks wereformed into coins1048710 Some of these coins were 9-12feet in diameter and weighed several tons
Monetary Payment Systems
Barter Economy
Commodity Money
Representative to Gold-backed money
Fiat Money and the Future
Commodity Money item which is useful in its intrinsic value as well as its monetary properties
Began with banks issuing paper receipts to depositors indicating that the receipt is redeemable for the precious goods being stored
Representative money made the practice of fractional reserve banking possible
Paper Currency
This money is not backed by reserves of another commodity
The money is given value by government fiat (Latin for ldquolet it be donerdquo) or decree
Functions of Money Medium of Exchange ndash acts as a go-between to make it easier
to buy and sell goods and services or pay debts Allows buyers and sellers to avoid the difficulties associated with barter exchanges
Store of Value ndash allows people to transfer the purchasing power of their present money income or wealth into the future ideally without a loss of value
Unit of Account ndash serves as a way to measure and compare the value of goods and services in relation to one another It also allows people to keep accurate financial records
Measurement of Money Supply
Measurement of Money Supply-Malaysia
M1currency and demand deposits held by the private
sector
M2 = M1 +savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by the commercial banks]
M3 = M2 + savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by other banks]
Money supply (or Money Stock)ndash The amount of money in an economy that is easily available for use in payments It is not just coins and notes in circulation
First Discussion
Do the official measures of Money Stock (M1 M2 and M3) accurately reflect the quantity of money in the economy
When we state M2 = Currency + Demand Deposits + Savings Deposits + Fixed Deposits + NCD + REPO what does
this mean
Second Discussion
What is the concept of Money in Islam
Must money in an Islamic economy be in the form of gold
Is fiat money incompatible with Islamic principles
- MONETARY ECONOMICS
- Content
- From Barter to Money
- Various Forms of Money
- Monetary Payment Systems
- Functions of Money
- Measurement of Money Supply
- First Discussion
- Second Discussion
-
From Barter to Money Barter is the exchange of a good or service for another good or service Barter requires a ldquodouble coincidence of wantsrdquo for a transaction to take
place A barter economy has fewer exchanges exchanges that are made are more
time consuming and less specialization is possible The frustrations associated with barter led people to create MONEY Over time may different items have served as money To serve as money an item must be SCARCE and
Portable Durable Divisible
Familiar (Uniform) Acceptable Stable in Value
Various Forms of Money
The use of cattle inexchange can be tracedback as far as 9000-6000 BC
Cowrie shells beingused as money can betraced to China in 1200BC
An Okpoho manilla (orbracelet) was an early form of money in Nigeria
The Katanga Cross was an archaic form ofmoney from WestAfrica
Bronze and copper replicas of shells weremanufactured in China by the end of the Stone Age and the Lydians (modern Turkey) coined gold and silver around 560 BC
Other Forms of Money- Whalersquos teeth- Bread- Spices
On the Micronesian Island of Yap huge limestone rocks wereformed into coins1048710 Some of these coins were 9-12feet in diameter and weighed several tons
Monetary Payment Systems
Barter Economy
Commodity Money
Representative to Gold-backed money
Fiat Money and the Future
Commodity Money item which is useful in its intrinsic value as well as its monetary properties
Began with banks issuing paper receipts to depositors indicating that the receipt is redeemable for the precious goods being stored
Representative money made the practice of fractional reserve banking possible
Paper Currency
This money is not backed by reserves of another commodity
The money is given value by government fiat (Latin for ldquolet it be donerdquo) or decree
Functions of Money Medium of Exchange ndash acts as a go-between to make it easier
to buy and sell goods and services or pay debts Allows buyers and sellers to avoid the difficulties associated with barter exchanges
Store of Value ndash allows people to transfer the purchasing power of their present money income or wealth into the future ideally without a loss of value
Unit of Account ndash serves as a way to measure and compare the value of goods and services in relation to one another It also allows people to keep accurate financial records
Measurement of Money Supply
Measurement of Money Supply-Malaysia
M1currency and demand deposits held by the private
sector
M2 = M1 +savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by the commercial banks]
M3 = M2 + savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by other banks]
Money supply (or Money Stock)ndash The amount of money in an economy that is easily available for use in payments It is not just coins and notes in circulation
First Discussion
Do the official measures of Money Stock (M1 M2 and M3) accurately reflect the quantity of money in the economy
When we state M2 = Currency + Demand Deposits + Savings Deposits + Fixed Deposits + NCD + REPO what does
this mean
Second Discussion
What is the concept of Money in Islam
Must money in an Islamic economy be in the form of gold
Is fiat money incompatible with Islamic principles
- MONETARY ECONOMICS
- Content
- From Barter to Money
- Various Forms of Money
- Monetary Payment Systems
- Functions of Money
- Measurement of Money Supply
- First Discussion
- Second Discussion
-
Various Forms of Money
The use of cattle inexchange can be tracedback as far as 9000-6000 BC
Cowrie shells beingused as money can betraced to China in 1200BC
An Okpoho manilla (orbracelet) was an early form of money in Nigeria
The Katanga Cross was an archaic form ofmoney from WestAfrica
Bronze and copper replicas of shells weremanufactured in China by the end of the Stone Age and the Lydians (modern Turkey) coined gold and silver around 560 BC
Other Forms of Money- Whalersquos teeth- Bread- Spices
On the Micronesian Island of Yap huge limestone rocks wereformed into coins1048710 Some of these coins were 9-12feet in diameter and weighed several tons
Monetary Payment Systems
Barter Economy
Commodity Money
Representative to Gold-backed money
Fiat Money and the Future
Commodity Money item which is useful in its intrinsic value as well as its monetary properties
Began with banks issuing paper receipts to depositors indicating that the receipt is redeemable for the precious goods being stored
Representative money made the practice of fractional reserve banking possible
Paper Currency
This money is not backed by reserves of another commodity
The money is given value by government fiat (Latin for ldquolet it be donerdquo) or decree
Functions of Money Medium of Exchange ndash acts as a go-between to make it easier
to buy and sell goods and services or pay debts Allows buyers and sellers to avoid the difficulties associated with barter exchanges
Store of Value ndash allows people to transfer the purchasing power of their present money income or wealth into the future ideally without a loss of value
Unit of Account ndash serves as a way to measure and compare the value of goods and services in relation to one another It also allows people to keep accurate financial records
Measurement of Money Supply
Measurement of Money Supply-Malaysia
M1currency and demand deposits held by the private
sector
M2 = M1 +savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by the commercial banks]
M3 = M2 + savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by other banks]
Money supply (or Money Stock)ndash The amount of money in an economy that is easily available for use in payments It is not just coins and notes in circulation
First Discussion
Do the official measures of Money Stock (M1 M2 and M3) accurately reflect the quantity of money in the economy
When we state M2 = Currency + Demand Deposits + Savings Deposits + Fixed Deposits + NCD + REPO what does
this mean
Second Discussion
What is the concept of Money in Islam
Must money in an Islamic economy be in the form of gold
Is fiat money incompatible with Islamic principles
- MONETARY ECONOMICS
- Content
- From Barter to Money
- Various Forms of Money
- Monetary Payment Systems
- Functions of Money
- Measurement of Money Supply
- First Discussion
- Second Discussion
-
Monetary Payment Systems
Barter Economy
Commodity Money
Representative to Gold-backed money
Fiat Money and the Future
Commodity Money item which is useful in its intrinsic value as well as its monetary properties
Began with banks issuing paper receipts to depositors indicating that the receipt is redeemable for the precious goods being stored
Representative money made the practice of fractional reserve banking possible
Paper Currency
This money is not backed by reserves of another commodity
The money is given value by government fiat (Latin for ldquolet it be donerdquo) or decree
Functions of Money Medium of Exchange ndash acts as a go-between to make it easier
to buy and sell goods and services or pay debts Allows buyers and sellers to avoid the difficulties associated with barter exchanges
Store of Value ndash allows people to transfer the purchasing power of their present money income or wealth into the future ideally without a loss of value
Unit of Account ndash serves as a way to measure and compare the value of goods and services in relation to one another It also allows people to keep accurate financial records
Measurement of Money Supply
Measurement of Money Supply-Malaysia
M1currency and demand deposits held by the private
sector
M2 = M1 +savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by the commercial banks]
M3 = M2 + savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by other banks]
Money supply (or Money Stock)ndash The amount of money in an economy that is easily available for use in payments It is not just coins and notes in circulation
First Discussion
Do the official measures of Money Stock (M1 M2 and M3) accurately reflect the quantity of money in the economy
When we state M2 = Currency + Demand Deposits + Savings Deposits + Fixed Deposits + NCD + REPO what does
this mean
Second Discussion
What is the concept of Money in Islam
Must money in an Islamic economy be in the form of gold
Is fiat money incompatible with Islamic principles
- MONETARY ECONOMICS
- Content
- From Barter to Money
- Various Forms of Money
- Monetary Payment Systems
- Functions of Money
- Measurement of Money Supply
- First Discussion
- Second Discussion
-
Functions of Money Medium of Exchange ndash acts as a go-between to make it easier
to buy and sell goods and services or pay debts Allows buyers and sellers to avoid the difficulties associated with barter exchanges
Store of Value ndash allows people to transfer the purchasing power of their present money income or wealth into the future ideally without a loss of value
Unit of Account ndash serves as a way to measure and compare the value of goods and services in relation to one another It also allows people to keep accurate financial records
Measurement of Money Supply
Measurement of Money Supply-Malaysia
M1currency and demand deposits held by the private
sector
M2 = M1 +savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by the commercial banks]
M3 = M2 + savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by other banks]
Money supply (or Money Stock)ndash The amount of money in an economy that is easily available for use in payments It is not just coins and notes in circulation
First Discussion
Do the official measures of Money Stock (M1 M2 and M3) accurately reflect the quantity of money in the economy
When we state M2 = Currency + Demand Deposits + Savings Deposits + Fixed Deposits + NCD + REPO what does
this mean
Second Discussion
What is the concept of Money in Islam
Must money in an Islamic economy be in the form of gold
Is fiat money incompatible with Islamic principles
- MONETARY ECONOMICS
- Content
- From Barter to Money
- Various Forms of Money
- Monetary Payment Systems
- Functions of Money
- Measurement of Money Supply
- First Discussion
- Second Discussion
-
Measurement of Money Supply
Measurement of Money Supply-Malaysia
M1currency and demand deposits held by the private
sector
M2 = M1 +savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by the commercial banks]
M3 = M2 + savings deposits + fixed deposits of all maturities + net issues of
NCD + repo transactions effected [ofto the private sector]
[by other banks]
Money supply (or Money Stock)ndash The amount of money in an economy that is easily available for use in payments It is not just coins and notes in circulation
First Discussion
Do the official measures of Money Stock (M1 M2 and M3) accurately reflect the quantity of money in the economy
When we state M2 = Currency + Demand Deposits + Savings Deposits + Fixed Deposits + NCD + REPO what does
this mean
Second Discussion
What is the concept of Money in Islam
Must money in an Islamic economy be in the form of gold
Is fiat money incompatible with Islamic principles
- MONETARY ECONOMICS
- Content
- From Barter to Money
- Various Forms of Money
- Monetary Payment Systems
- Functions of Money
- Measurement of Money Supply
- First Discussion
- Second Discussion
-
First Discussion
Do the official measures of Money Stock (M1 M2 and M3) accurately reflect the quantity of money in the economy
When we state M2 = Currency + Demand Deposits + Savings Deposits + Fixed Deposits + NCD + REPO what does
this mean
Second Discussion
What is the concept of Money in Islam
Must money in an Islamic economy be in the form of gold
Is fiat money incompatible with Islamic principles
- MONETARY ECONOMICS
- Content
- From Barter to Money
- Various Forms of Money
- Monetary Payment Systems
- Functions of Money
- Measurement of Money Supply
- First Discussion
- Second Discussion
-
Second Discussion
What is the concept of Money in Islam
Must money in an Islamic economy be in the form of gold
Is fiat money incompatible with Islamic principles
- MONETARY ECONOMICS
- Content
- From Barter to Money
- Various Forms of Money
- Monetary Payment Systems
- Functions of Money
- Measurement of Money Supply
- First Discussion
- Second Discussion
-