The Role of Money and the Banking System
Required Readings:
- Read Module: Monetary Policy, first 14 items
- The Wall Street Journal
Additional Readings:
- Michael Specter, “Capitalizing on Yankee Ingenuity“
- R. A. Radford, “The Economics of a POW Camp“
- Free Exchange, “On the Origin of Specie.” The Economist, August 18, 2012.
- James Surowieki, What is Money?
LEARNING OBJECTIVES FOR TOPIC 4:
- You should be able to define money in your own words.
- You should be able to explain the various functions of money.
- You should be able to explain “liquidity”.
- You should be able to explain how the existence of money improves the workings of an economy.
- You should be able to define financial markets, and explain how they improve the workings of an economy.
- You should be able to explain the important economic functions banks provide.
- You should be able to explain the difference between M1, M2, and M3.