Chapter 12 introduce to the money and banking. In this chapter you will learn: The definition and function of money, what constitutes the supply of money, what backs Canada’s money supply, about the structure of the Canadian financial system.
Trang 1Money & Banking
Chapter 12
Trang 2© 2002 McGraw-Hill Ryerson Ltd Macroeconomics, Chapter 12 2
In this chapter you will learn
The definition and function of money
What constitutes the supply of money
What backs Canada’s money supply
About the structure of the Canadian
financial system
Trang 3Chapter 12 Topics
The Functions of Money
The Supply of Money
What “Backs” the Money Supply?
The Canadian Banking System
Recent Developments in Money &
Banking
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The Functions of Money
Medium of exchange
Trang 5The Functions of Money
Medium of exchange
Unit of account
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The Functions of Money
Medium of exchange
Unit of account
Store of value
Trang 7Chapter 12 Topics
The Functions of Money
The Supply of Money
What “Backs” the Money Supply?
The Canadian Banking System
Recent Developments in Money &
Banking
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Currency (coins & paper money)
plus Demand deposits
equals M1
M1
(billions of dollars) December, 2000
109.6
The Supply of Money
Table 12-1
Trang 9The Supply of Money
Currency: Coins + Paper Money
• token money
• Bank of Canada notes
Demand Deposits
Institutions That Offer Demand Deposits
• trust companies, caisses populaires, credit
unions
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Currency (coins & paper money)
plus Demand deposits
equals M1
plus Personal savings deposits ,
plus Non-personal notice deposits
109.6
Trang 11The Supply of Money
Near-monies
• nonchequable savings deposits
• term deposits
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Currency (coins & paper money)
plus Demand deposits
equals M1
plus Personal savings deposits ,
plus Nonpersonal notice deposits
109.6
Trang 13What about credit cards?
Credit cards are NOT money!
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Chapter 12 Topics
The Functions of Money
The Supply of Money
What “Backs” the Money Supply?
The Canadian Banking System
Recent Developments in Money &
Banking
Trang 15What “Backs” the Money Supply?
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What “Backs” the Money Supply?
Money & Prices
• The Purchasing Power of the Dollar
Trang 17What “Backs” the Money Supply?
Money & Prices
• The Purchasing Power of the Dollar
• Inflation & Acceptability
Stabilization of Money’s Value
• requires appropriate fiscal & monetary
policy
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Chapter 12 Topics
The Functions of Money
The Supply of Money
What “Backs” the Money Supply?
The Canadian Banking System
Recent Developments in Money &
Banking
Trang 19The Canadian Banking
System
Evolution of the Canadian Banking
System
Present Structure
• the big six
• the largest Canadian bank is 55th in the
world
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Assets (U.S $ billions)
GLOBAL PERSPECTIVE 12.1
Trang 21Assets Liabilities
March 2001 ($ Billions)
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The Canadian Banking
System
Making Loans
Other Financial Intermediaries
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The Canadian Banking
System
Making Loans
Other Financial Intermediaries
Cheque Clearing
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The Functions of Money
The Supply of Money
What “Backs” the Money Supply?
The Canadian Banking System
Recent Developments in Money &
Banking
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Recent Developments in
Money & Banking
Expansion of Services
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Trang 29Chapter 12 Topics
The Functions of Money
The Supply of Money
What “Backs” the Money Supply?
The Canadian Banking System
Recent Developments in Money &
Banking
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How Banks Create Money
Chapter 13
Coming up next