money

(noun)

A generally accepted means of exchange and measure of value.

Related Terms

Examples of money in the following topics:

  • The Money Multiplier in Theory

    • The money multiplier measures the maximum amount of commercial bank money that can be created by a given unit of central bank money.
    • In order to understand the money multiplier, it's important to understand the difference between commercial bank money and central bank money.
    • When you think of money, what you probably imagine is commercial bank money.
    • The money multiplier measures the maximum amount of commercial bank money that can be created by a given unit of central bank money.
    • We can derive the money multiplier mathematically, writing M for commercial bank money (loans), R for reserves (central bank money), and RR for the reserve ratio.

  • The Definition of Money

    • Money comes in three forms: commodity money, fiat money, and fiduciary money.
    • The commodity itself constitutes the money, and the money is the commodity.
    • Paper money is an example of fiat money.
    • However, for most of history, almost all money was commodity money, such as gold and silver coins.
    • The status of money as legal tender means that money can be used for the discharge of debts.

  • Understanding the Cost of Money

    • The cost of money is the opportunity cost of holding money instead of investing it, depending on the rate of interest.
    • The concept of the cost of money has its basis, as does the subject of finance in general, in the time value of money.
    • The cost of money is the opportunity cost of holding money in hands instead of investing it.
    • The trade-off between money now (holding money) and money later (investing) depends on, among other things, the rate of interest that can be earned by investing.
    • The cost of money is the opportunity cost of holding money in hands instead of investing it.

  • Measuring the Money Supply

    • In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time.
    • In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time.
    • In economics, the monetary base (also base money, money base, high-powered money, reserve money, or, in the UK, narrow money) is a term relating to (but not being equivalent to) the money supply (or money stock) or the amount of money in the economy.
    • M2: Represents money and "close substitutes" for money.
    • In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time.

  • The Demand for Money

    • In economics, the demand for money is the desired holding of financial assets in the form of money (cash or bank deposits).
    • The equation for the demand for money is: Md = P * L(R,Y).
    • Money is necessary in order to carry out transactions.
    • It is viewed as a "cost" of borrowing money.
    • Monetary policy also impacts the money supply.

  • Types of Currency

    • However, nearly all contemporary money systems are based on fiat money.
    • Fiat money is money that derives its value from government regulation or law.
    • The commodity itself constitutes the money, and the money is the commodity.
    • Commercial bank money differs from commodity and fiat money in two ways.
    • Fiat, Commodity, and Commercial Bank money are three main types of money

  • Shifts in the Money Demand Curve

    • In economics, the demand for money is the desired holding of financial assets in the form of money.
    • The interest rate is the price of money.
    • The real demand for money is defined as the nominal amount of money demanded divided by the price level.
    • When the demand curve shifts to the right and increases, the demand for money increases and individuals are more likely to hold on to money.
    • Explain factors that cause shifts in the money demand curve, Explain the implications of shifts in the money demand curve

  • Other Measurements of the Money Supply

    • MB: Stands for "monetary base," referring to the base from which all other forms of money are created.
    • M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).
    • It is M2 – time deposits + money market funds.
    • The different forms of money in the government money supply statistics arise from the practice of fractional-reserve banking.
    • This new type of money is what makes up the non-M0 components in the M1-M3 statistics.

  • Present Value and the Time Value of Money

    • The time value of money is the principle that a certain amount of money today has a different buying power (value) than in the future.
    • The time value of money is the principle that a certain amount of money today has a different buying power (value) than the same currency amount of money in the future.
    • This notion exists both because there is an opportunity to earn interest on the money and because inflation will drive prices up, thus changing the "value" of the money.
    • The return of $5 represents the time value of money over the one year interval .
    • The time value of money is the central concept in finance theory.

  • The Equilibrium Interest Rate

    • In a economy, equilibrium is reached when the supply of money is equal to the demand for money.
    • Equilibrium is reached when the supply of money is equal to the demand for money.
    • Political gain: both monetary and fiscal policies can affect the money supply and demand for money.
    • In the case of money supply, the market equilibrium exists where the interest rate and the money supply are balanced.
    • Without external influences, the interest rate and the money supply will stay in balance.