Money
Overview
Money is unit the exchange in an economy, that is, the
price of good or service is denominated in terms of a given currency.
{% Price = \frac{1 \; unit \; product}{amount \; of \; currency} %}
Properties of Money
In order to operate as an effective currency, the best forms of money possess the following characteristics.
Measures of Money
Economists measure the total money supply in different ways.
- C - currency
- M1 - currency, demand deposits, travelers checks, other checkable deposits
- M2 - M1, retail money market mutual funds, savings deposits, small time deposits