primary fun medium of exchange measure of value secondary fun. standard of deferred payments store...

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FUNCTION OF MONEY

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Page 1: Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE

FUNCTION OF MONEY

Page 2: Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE

Primary funMEDIUM OF EXCHANGEMEASURE OF VALUE

Page 3: Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE

SECONDARY FUN.STANDARD OF DEFERRED PAYMENTSSTORE OF VALUETRANSFER OF VALUE

Page 4: Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE

CONTINGENT FUN.BASIS OF CREDIT CREATIONMAXIMUM SATISFACTIONDISTRIBUTION OF NATIONAL INCOMEBEARER OF OPTIONGUARANTEE OF SOLVENCYINCREASE IN LIQUIDITY OF CAPITAL

Page 5: Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE

THEORIES OF MONEYQUANTITY THEORY OF MONEY1. Fisher ‘EQUATION OR TRANSACTION

EQUATION2. CASH BALANCE OR CAMBRIDGE

EQUATION

Page 6: Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE

FISHER EQUATIONASSUMPTIONSCONSTANT VALUE OF V AND V’FULL EMP.CONSTANT TRADE TRANSATIONLONG PERIODPRICE LEVEL IS PASSIVE FACTORM IS ACTIVE FACTOR

Page 7: Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE

FISHER EQUATIONPurchasing power of money - 1911 QM AND PRICE OF GOOD- DIRECT

RELATIONQM AND VALUE OF MONEY - INDIRECT

DM=SM M’= CREDIT MONEY

PT=MV+M’V’ P=MV+M’V’ T

Page 8: Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE

M=F(P)

Page 9: Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE