Functions and Measures of Money
A universally accepted medium used by sellers for the payment of goods and services and by creditors as payment for debts.
What is Money?
A national bank that provides financial and banking services to a country's government.
What is Central Bank?
A statement of a business or financial institution's assets and liabilities.
What is Balance Sheet?
Medium of Exchange
Unit of Accounting
Store of Value (Purchasing Power)
Standard of Deferred Payment
What is the Function of Money?
Anything that holds economic value and is controlled or owned by a business or household, with the expectation of providing future benefit.
What is Assets?
The specific amount of funds that a bank chooses to hold to ensure the bank can meet customer withdrawal demands and manage fluctuations in deposits.
What is Desired Reserves?
A method of measuring money by categorizing different forms of money based on how easily they can be converted into cash.
What is the Liquidity Approach?
A situation where a borrower might engage in riskier behaviour after a loan has been obtained
What is Moral Hazard?
A system where banks are required to keep only a fraction of their deposits as reserves.
What is Fractional Reserve Banking?
A currency system where the government issues money as a legal tender, and its value is based on the public's trust in the issuer.
What is the Fiduciary Monetary System?
Where institutions accept savings from businesses, households, and governments and lend the savings to other businesses, households, and governments.
What is Financial Intermediation?
A government agency that protects and insures eligible deposits and acts as a safety net for Canadians at financial institutions.
What is Canadian Deposit Insurance Corporation?