Money Supply

1
Money Supply

• Chapter 10 Section 2

2
Objectives

• What does the money supply consist of?
• What is a Federal Reserve Note?

3
Are credit cards money?

• Are all credit cards are accepted?
• Do they pay-off debt?
• Credit cards transfer debt
• Again, are credit cards money?
• No!

4
Money Supply Components

• 1. Currency
• Coins paper money
• (Federal Reserve Notes)
• 2. Travelers Checks
• Demand Deposits (converted into currency on
  demand)
• 3. Checking Accounts
• Demand Deposits

5
Which is the largest component?

• Currency
• Travelers Checks
• Checking Accounts

• 516 Billion
• 8 Billion
• 585 Billion

As of March 2000, U.S. Money Supply 1, 109
Billion
6

• Savings Account
• Interest earning account
• 2 Types of Savings Accounts
• Write checks Checking Accounts
• Passbook Savings Account

7
Is a Savings Account Considered to be Money?

• If you can write checks from it,
• YES!
• If you cannot write checks from it,
• NO!

8

• Near-Money
• Easily turned into money
• Example
• Passbook Savings Account

9
Assessment

• What does the money supply consist of?
• What is a Federal Reserve Note?

10
What do you know about.?

• Checking Accounts
• Interest Rates
• Pullovers
• Credit Cards
• Interest Rate