Money Market.pptx an important topic in the ecnomics

Very advance topicc in ecnnomics

1. Money Market Financial system

2. Introduction Money market activities Lending and Borrowing Effect on growth Consumption, investment, Employment, output… Financial crisis 2007 2020

3. Financial System Monetary VS Non monetary Monetary ( Currency, Cheques ) Non Monetary (Bonds, stocks, certificates, saving accounts) Liquidity ( Any thing that is easily convertible in cash) Non liquidity Funds Common stock Mutual Funds Pension Funds

4. Interest Nominal vs Real Definition ; price paid for borrowing Money Types ; Taxes, loan etc Rate of return on capital and investment is also interest REAL INTEREST Inclusion of Inflation Nominal interest In terms of money exclusive of inflation To calculate annual yield of investment....must go for real interest

5. Money Any thing that serves as medium of exchange A wider concept than currency because it has so many forms It’s a material not a consumer or capital good Examples ( Currency notes, cheques , bills, electronic money)

6. Evolution of money 1. BARTER SYESTEM Exchange of goods with others goods Difficulties; Double coincidence of wants Lack of common measure of value Indivisibility of goods Difficulty in storing borrowing and lending Govt taxes Transfer of wealth

7. Commodity money Medium of exchange in forms commodity Cattles, olive oil, salt, gold, silver, ornaments, diamonds Disadvantages Value and form changes In 18 th century only gold and silver Scarcity Digging Lack of abundance

8. Modern money No intrinsic value in itself Central bank authority PAPER MONEY Can be spent directly Not be consumed Keep it for future ADVANTAGES easily carried and stored Cant be illegally created

9. Bank money electronic money Cheques Accounts Saving accounts Current accounts DISDVANTAGES Can be destroyed by fire flood High inflation Foreign payments, Fake money Must be regulated and controlled

10. Role and functions of money Widely accepted medium of exchange Measure of value Unit of account Store of value Transfering value Govt payments Dynamic Functions Effect on price level