EKONOMI MONETER

Prepared by Shochrul Rohmatul Ajija

Source:
Frederic S. Mishkin The Economics of Money,
Banking, and Financial Markets, Eight Edition
Why Study Money, Banking, &
Financial Markets?
Any item that people are generally willing to
accept in exchange for goods, services, and
financial assets such as stocks or bonds is
called Money
Moneys Function
Medium of exchange
People who trade goods, services, or financial assets are
willing to accept money in exchange for these items
Store of value
An individual can set money aside today with an intent to
purchase items at a later time
Unit of account
People maintain their financial accounts by using money to
value goods, services, and financial assets
Standard of deferred payment
People agree to loan contracts that call for future
repayments in terms of money
Methods of Exchange and the
Evolution of Money
Barter
A person who wished to exchange a good or service had to find a second
individual willing to purchase that good or service, vice versa It
requires a double coincidence of wants
Commodity Moneys
A good with a nonmonetary value that is also used as money, e.g. gold.
Purchasing power of money: the value of money in terms of the amount
of real goods and services it buys
Commodity Standard
A money unit whose value is fully or partially backed by the value of some
other physical good such as gold or silver
Gold standard: a monetary system in which the value of money is linked to
the value of gold
Bimetallic standard: a monetary system in which the value of money
depends on the values of two precious metals, such as gold and silver

Methods of Exchange and the
Evolution of Money
Fiat Money
A token that has value only because it is
accepted as money
Electronic Money (e-money)
Money that people can transfer directly via
electronic impulses

Discussion
Can barter make a
comeback in
internet?
Glossaries
Liquidity is the relative ease and speed with
which an asset can be converted into cash
Hyperinflation is an extreme inflation in which
the inflation rate exceeds 50% per month

Measuring Money
M
3
is a measure of money that adds to M
2
: large-
denomination time deposits, long-term repurchase
agreements, and institutional money market fund
shares

Measuring Money
Monetary aggregates are the various measures of
the money supply used by the Federal Reserve
System (M
1,
M
2,
& M
3
)
M
1
is a measure of money that includes currency,
travelers checks, and checkable deposits
M
2
is a measure of money that adds to M
1
: money
market deposit accounts, money market mutual fund
shares, small-denomination time deposits, savings
deposits, overnight repurchase agreements, and
overnight Eurodollars


Measuring Money
Measuring Money
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