金融英语Lecture 1 MoneyWord格式.docx

金融英语Lecture 1 MoneyWord格式.docx

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Privatedebtmoney

Aloanthattheborrowerpromisestorepayincurrencyondemand.E.g.IOUthecheckabledepositatcommercialbanksandotherfinancialinstitutions.

Commercialnotes（商业票据）:

Short-term,unsecured,discounted,andnegotiablenotessoldbyonecompanytoanotherinordertosatisfyimmediatecashneeds.

Include:

promissorynote（期票，拮据）draft（汇票）checkandsoon.

Electronicmoney:

ElectronicCheck,InternetPaymentSystem,CreditCardService

Whatdoesmoneydo?

A.MediumofExchange

Inalmostallmarkettransactionsinoureconomy,moneyintheformofcurrencyorchecksisamediumofexchange;

itisusedtopayforgoodsandservices.Theuseofmoneyasamediumofexchangepromoteseconomicefficiencybyeliminatingmuchofthetimespentinexchanginggoodsandservices.

Terms:

Transactioncost,Timevalueofmoney

B.UnitofAccount

Thesecondroleofmoneyistoprovideaunitofaccount;

thatis,itisusedtomeasurevalueintheeconomy.Wemeasurethevalueofgoodsandservicesintermsofmoney,justaswemeasureweightintermsofpoundsordistanceintermsofmiles.

Note:

Fiatmoneyhasnotonlynoparticularvalueinuse;

itdoesn'

tevenreallyhaveavalueinexchangeexceptthatwhichisdecreedthatitwouldhave.

Goodmoney,Badmoney

C.StoreofValue

Moneyalsofunctionsasastoreofvalue:

itisarepositoryofpurchasingpowerovertime.Itisanasset.It'

ssomethingthatwecanusetostorevalueawaytoberetrievedatalaterpointintime.Sowecannotconsumetoday,wecanholdmoneyinstead-andtransferthatconsumptionpowertosomepointinthefuture.

Term:

Hardcurrency

MeasuringMonetaryAggregates

1.Measureas“money”onlythoseassetsthataremostliquid,hencethatfunctionbestasamediumofexchange.

2.Includeallfinancialassetsinthemeasureofmoney,butweighttheminproportiontotheirliquidity.

1.M1=MostNarrowMeasure（MostLiquid）

M1=currency+traveler’schecks+demanddeposits+othercheckabledeposits

2.M2=M1+LessLiquidAssets

M2=M1+smalldenominationtimedeposits+savingsdeposits+moneymarketdepositaccounts+moneymarketmutualfundshares

3.M3=M2+LessLiquidAssets

Moneysupply

Therevenueraisedthroughtheprintingofmoney.Whenthegovernmentprintsmoneytofinanceexpenditure,itincreasesthemoneysupply.Theincreaseinthemoneysupply,inturn,causesinflation.Printingmoneytoraiserevenueislikeimposinganinflationtax.

Toexpandthemoneysupply:

TheFederalReservebuysTreasuryBondsandpaysforthemwithnewmoney.

Toreducethemoneysupply:

TheFederalReservesellsTreasuryBondsandreceivestheexistingdollarsandthendestroysthem.

Inflation

Inflationisanincreaseintheaveragelevelofprices,andapriceistherateatwhichmoneyisexchangedforagoodorservice.

Hereisagreatillustrationofthepowerofinflation:

In1970,theNewYorkTimescost15cents,themedianpriceofasingle-familyhomewas$23,400,andtheaveragewageinmanufacturingwas$3.36perhour.In2008,theTimescost$1.50,thepriceofahomewas$183,300,andtheaveragewagewas$19.85perhour.

Hyperinflationisdefinedasinflationthatexceeds50percentpermonth,whichisjustover1percentaday.

Questions

1.Moneyisnotuniqueasastoreofvalue;

anyasset,beitmoney,stocks,bonds,land,houses,art,orjewelry,canbeusedtostorewealth.Manysuchassetshaveadvantagesovermoneyasastoreofvalue:

Theyoftenpaytheownerahigherinterestratethanmoney,experiencepriceappreciation,anddeliverservicessuchasprovidingaroofoverone'

shead.Iftheseassetsareamoredesirablestoreofvaluethanmoney,whydopeopleholdmoneyatall?

Theanswertothisquestionrelatestotheimportanteconomicconceptofliquidity.

2.Rankthefollowingassetsfrommostliquidtoleastliquid:

a.Checkingaccountdepositsb.Housesc.Currency

d.Washingmachinese.Savingsdepositsf.Commonstock

3.Whyhavesomeeconomistsdescribedmoneyduringahyperinflationasa“hotpotato”thatisquicklypassedfromonepersontoanother?

4.WasmoneyabetterstoreofvalueintheUnitedStatesinthe1950sthanitwasinthe1970s?

Whyorwhynot?

Inwhichperiodwouldyouhavebeenmorewillingtoholdmoney?

5.InBrazil,acountrythatwasundergoingarapidinflationbefore1994,manytransactionswereconductedindollarsratherthaninReals,thedomesticcurrency.Why?

Quiz

1.Fiatmoneyis:

A.creditcardchargesB.Coins

C.notconvertibleintopreciousmetals.D.checks

Answer:

C

2.Whichoftheseisnotafunctionofmoneyinaneconomy?

A.StoreofvalueB.Mediumofexchange

C.SourceofincomeD.Unitofaccount

C

3.WhichofthefollowingisnotpartofM1?

A.checkingaccountsB.traveler'

schecks

C.savingsaccountsD.currency

4.IfMarydeposits$100ofhercurrencyinhercheckingaccount,then:

A.M1willincreaseby$100.B.M2willfallby$100.

C.M1andM2willnotchange.D.M2willincreaseby$100.

C

5.IfMarymoves$100fromhersavingsaccounttohercheckingaccount,then:

A.M1willnotchange.B.M2willnotchange.

C.M1willfallby$100.D.M2willfallby$100.

B

6.WhichofthefollowingisnotpartofM2?

A.SmalltimedepositsB.Currency

C.InstitutionalmoneymarketmutualfundsD.Savingaccounts

7.Inefficienciesthatarecreatedwhenusingchecksasmoneyinclude:

A.Checkscantransferfundsslowly.

B.Therearetoomanybadcheckswritten.

C.Checkbookscanbestolen.

D.Checkscanbewrittenforanyamount.

A

8.Theliquidityofanassetis:

A.theabilityofanassettoearninterestincome.

B.theamountofanassetsoldatdiscountorpremium.

C.therelativeeasewithwhichanassetcanbeconvertedintoamediumofexchange.

D.therelativeeasewithwhichanassetcanbeconvertedintoacommonstock.

9.Foracommoditytofunctioneffectivelyasmoney,itmust

A.Bewidelyaccepted.B.Bebackedbygoldorsilver.

C.Beindestructible.D.Beprintedbythegovernment.

10.Moneysupplydataisgeneratedby:

A.TheDepartmentofCommerce

B.TheFederalDepositInsuranceCorporation（FDIC）

C.TheFederalReserveSystem（theFed）

D.TheTreasuryDepartment

11.Whichofthefollowingcorrectlyshowstheevolutionofthepaymentssystem?

A.Commoditymoney,fiatmoney,checks,electronicmoney.

B.Commoditymoney,fiatmoney,electronicmoney,checks.

C.Commoditymoney,checks,fiatmoney,electronicmoney.

D.Fiatmoney,commoditymoney,checks,electronicmoney.

A

12.Whichofthefollowingistrueregardingmoney'

sstoreofvaluefunction?

A.moneydoesnotallowapersontoholdpurchasingpowerfromthetimeincomeisearneduntilitisspent.

B.moneyistheonlystoreofvalueavailable.

C.moneyisthemostliquidstoreofvalueavailable.

D.moneyissuperiortoallotherstoresofvalueduringperiodsofinflation.

13.Whichofthefollowingisnotadisadvantageofelectronicmoney?

A.Peopleareconcernedabouttheprivacyandsecurityofe-moneytransactions.

B.E-moneytransactionscostmorethanpaperchecktransactions.

C.Thecostofsettingupasystemforprocessinge-moneypaymentsishigh.

D.E-moneydoesnotallowpeopletotakeadvantageoffloat.

B

14.Wealthis

A.Generallyacceptedfortherepaymentofdebts

B.Aflowofearningsperunitoftime

C.Astockconcept

D.Thetotalcollectionofpiecesofpropertythatservetostorevalue

D

15.TheFed'

smeasurementsofmonetaryaggregates

A.Aremorereliableintheshortrunthanthelongrun.

B.Arerevisedonceayear.

C.Doesnotdependonthedefinitionofmoney.

D.Aremorereliableinthelongrunthantheshortrun.