Money and Asset Markets
Money: assets that are widely used and
accepted as payments.
Functions of Money
Medium of Exchange
Unit of Account
Store of Value
M1:
Currency
Travelers' Checks
Demand Deposits
Other Checkable Deposits
M2:
Components of M1
Savings Deposits, including MMDA's
Small-denomination Time Deposits
Money Market Mutual Funds
Money Supply: Influenced by Central Bank
Money Demand: Portfolio Allocation
Money vs. all other assets