primary fun medium of exchange measure of value secondary fun. standard of deferred payments store...
TRANSCRIPT
FUNCTION OF MONEY
Primary funMEDIUM OF EXCHANGEMEASURE OF VALUE
SECONDARY FUN.STANDARD OF DEFERRED PAYMENTSSTORE OF VALUETRANSFER OF VALUE
CONTINGENT FUN.BASIS OF CREDIT CREATIONMAXIMUM SATISFACTIONDISTRIBUTION OF NATIONAL INCOMEBEARER OF OPTIONGUARANTEE OF SOLVENCYINCREASE IN LIQUIDITY OF CAPITAL
THEORIES OF MONEYQUANTITY THEORY OF MONEY1. Fisher ‘EQUATION OR TRANSACTION
EQUATION2. CASH BALANCE OR CAMBRIDGE
EQUATION
FISHER EQUATIONASSUMPTIONSCONSTANT VALUE OF V AND V’FULL EMP.CONSTANT TRADE TRANSATIONLONG PERIODPRICE LEVEL IS PASSIVE FACTORM IS ACTIVE FACTOR
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
M=F(P)