Difference between revisions of "Money"
| Line 1: | Line 1: | ||
==Economic Properties of Money== | ==Economic Properties of Money== | ||
| − | Money is defined as something which serves as a means of exchange, a store of value, and a unit of account. The currency which serves as money may be backed by some tangible commodity, or may be fiat money. Alternatively, trade may be carried on using commodity pay, wherein existing commodities are assigned exchange values but not explicitly designated as money. | + | Money is defined as something which serves as a means of exchange, a store of value, and a unit of account. The currency which serves as money may be backed by some tangible commodity, such as the [[GOld Standard]], or may be [[fiat money]], such as [[Federal Reserve]] notes. Alternatively, trade may be carried on using commodity pay, wherein existing commodities are assigned exchange values but not explicitly designated as money. |
==Money Neutrality and the Money Market== | ==Money Neutrality and the Money Market== | ||
Revision as of 21:51, May 28, 2007
Economic Properties of Money
Money is defined as something which serves as a means of exchange, a store of value, and a unit of account. The currency which serves as money may be backed by some tangible commodity, such as the GOld Standard, or may be fiat money, such as Federal Reserve notes. Alternatively, trade may be carried on using commodity pay, wherein existing commodities are assigned exchange values but not explicitly designated as money.
Money Neutrality and the Money Market
Money may be viewed as neutral or non-neutral regarding the real economy; it is disputed whether changes in the money market cause changes in real markets. The money market itself consists of a money supply (typically fixed for any given period) and a demand function for money. Because the quantity of money is typically exogenously given, the only variable determined in the money market is the price of money.
