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M3: The wide-range monetary aggregate for the U.S. economy containing the combination of M2 (currency, checkable deposits, and assorted savings deposits) and large-denomination, institutional near monies. M3 contains financial assets that are relatively liquid, but not quite as liquid as those found in M1 or M2. The near monies added to M2 to derive M3 include large denomination certificates of deposit, institutional money market mutual funds, repurchase agreements, and Eurodollars. M3 is one of three monetary aggregates tracked and reported by the Federal Reserve System. The other two are designated M1 and M2.
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Lesson 17: Money | Unit 2: More About Money
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Page: 10 of 25
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- The four functions of money:
- Medium of exchange: money makes it easier to buy, sell, produce, and consume goods and services.
- Measure of value: prices are stated in terms of the monetary unit.
- Store of value: value can be stored over time with money.
- Standard of deferred payment: future payments are also in terms of the monetary unit.
- Using money as a medium of exchange eases the exchange process, makes it more efficient, and frees resources for production.
- Using money as the unit for prices gives a measure for value, that is, how much value we place on a good.
- Price inflation is the nemesis for the store of value function of money.
- Money is used as a standard for buying now and paying later.
- The four characteristics of money:
- Durable: It helps to retain value from one exchange to do the next and store value for future exchanges.
- Divisible: It lets us accurately match an amount of money to the precise value of a good.
- Transportable: It allows us to conduct exchanges far and wide, to go where we need to go for an exchange.
- Non-counterfeitable: It keeps the value of money from being diluted.
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DEMAND CURVE A graphical representation of the relation between the demand price and quantity demanded, holding all ceteris paribus demand determinants constant. A demand curve graphically illustrates the law of demand, the inverse relation between demand price and quantity demanded for a particular good. It is one half of the standard market model; a supply curve is the other half.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time touring the new suburban shopping complex seeking to buy either a green and yellow striped sweater vest or a Boston Red Sox baseball cap. Be on the lookout for strangers with large satchels of used undergarments.
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The first paper notes printed in the United States were in denominations of 1 cent, 5 cents, 25 cents, and 50 cents.
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"Whenever an individual or a business decides that success has been attained, progress stops. " -- Thomas Watson Jr., IBM executive
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FHLBB
Federal Home Loan Bank Board
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