Functions of Money Medium of exchange Used to buy/sell goods Unit of account Goods are valued in dollars Store of value A place to store wealth. LO1 31-* Money Definition…
Interest Rates The price paid for the use of money Many different interest rates Speak as if only one interest rate Determined by the money supply and money demand LO1 33-*…
Ch 15 Monetary policy How does a change in money supply affect the economy? Relevant reading: Ch 13 Monetary policy The central bank of the United States The Federal Reserve…