The Money Supply and the Central Bank. An Overview of Money. Money is anything that is generally accepted as a medium of exchange. Money is not income, and money is not wealth. Money is: a means of payment, a store of value, and a unit of account. What is Money?.
M1 currency held outside banks + demand deposits + traveler’s checks + other checkable deposits
M2 /M1 + savings accounts + money market accounts + other near monies
Assets – liabilities / Net Worth, or
Assets / Liabilities + Net Worth
.00The Money Multiplier
The CB performs important functions for banks including:
The Central Bank performs important functions for banks including: