MoneyChapter 1Lead-inLanguageNotesKeyPointsFollow-upTasks1.11.31.21.4CONTENTSExtendedTasks1.51.1Lead-inIn this chapter,we will first of all examine the definition of moneythe definition of money,then introduce the meaning of monetary aggregate monetary aggregate,and finally discuss the main functions of moneyfunctions of money.Moneyisdefinedasanythingthatiscommonlyusedtopayforgoodsandservices.Economistsmakeadistinctionbetweenmoneyintheformofcurrency,demanddeposits,andotheritemsthatareusedtomakepurchasesandwealth,thetotalcollectionofpropertytostorevalue.Wealthincludesnotonlymoney,butalsootherassetssuchasbonds,commonstock,art,land,furniture,cars,andhouses.1.2KeyPoints1.2.1DefinitionofMoney1.2KeyPoints1.2.2MonetaryAggregatesM2consistsofeverythinginM1plussomehighlyliquidassetswhichcanbeconvertedtotheitemsinM1veryeasilywithoutthelossofvaluefortheprincipal.Theotherhighlyliquidassetsaresmallsavings,timedeposits,MMDAs,andindividualmoneymarketmutualfunds.M2M3consistsofeverythinginM2plussomeilliquidassets.Theassetsincludelargedeposits,repurchaseagreements,Europeandollars,institutionalmoney,andmarketmutualfunds.M3M0isameasureofthemoneysupplywhichcombinesanyliquidorcashassetsheldwithinacentralbankandtheamountofphysicalcurrencycirculatingintheeconomy.M0M1isthemeasurethatcorrespondsmostcloselytothedefinitionofmoney.Itconsistsofcurrencyheldbythepublicandcheckabledeposits.M11.2KeyPoints1.2.2MonetaryAggregatesM0M1M2M3any liquid or cash assetsdemand deposits and other checkable depositshighly liquid assetssome illiqyid assets1.2KeyPoints1.2.3FunctionsofMoneyMediumofExchangeMoney effectively eliminates the double coincidence ofwantsproblembyservingasamediumofexchangethatisaccepted in all transactions,by all parties,regardless ofwhethertheydesireeachothersgoodsorservices.1.2KeyPoints1.2.3FunctionsofMoneyStoreofValueMoney,asarepositoryofpurchasingpowerovertime,alsofunctionsasastoreofvalue.Itisanassetwhichcanbeusedtostorevalueforthefuture.Whenwedontconsumethemoneynow,wecansaveitandtransfertheconsumptionpowertosomepointinthefuture.1.2KeyPoints1.2.3FunctionsofMoneyUnitofAccountThethirdroleofmoneyistoprovideaunitofaccount.Thatistosay,moneyisusedtomeasurevalueintheeconomy.aggregategrgt总量accountkant账户assetset财产bondbnd债券currencykrnsi货币denominationdnmnen面额depositorydpztri存储liquidlkwd流动性的monetarymntri货币的principalprnspl本金1.3LanguageNotesI.Wordsbartereconomycheckingaccountcommoditymoneydemanddepositsdepositoryinstitutionsfiatmoneyfinancialclaimmediumofexchangemonetaryaggregatemoneymarketdepositaccounts(MMDAs)1.3LanguageNotesII.PhrasesnarrowmoneypapermoneystoreofvaluetheFederalReserveSystem(theFed)1.Itoccurredbecausegoldandsilvermerchantsorbankswouldissuereceiptstotheirdepositorsredeemableforthecommoditymoneydeposited.2.Economistsmakeadistinctionbetweenmoneyintheformofcurrency,demanddeposits,andotheritemsthatareusedtomakepurchasesandwealth,thetotalcollectionofpropertytostorevalue.3.Theyconsistofdemanddeposits,whicharenon-interest-earningcheckingaccountsissuedbybanks,andothercheckabledeposits,whichareinterest-earningcheckingaccountsissuedbysomedepositoryinstitutions.4.Eventhoughtheseotherassetsarenotusedtomaketransactions,theyareallhighlyliquid,sotheyareoftenreferredtoasnearmonies.5.Inotherwords,inabartersystem,theexchangecantakeplaceonlyifthereisadoublecoincidenceofwantsbetweentwotransactingparties.1.3LanguageNotesIII.Sentences1.4Follow-upTasksI.Matching()1.ameansofpaymentA.债务偿还()2.checkabledepositsB.普通股()3.paymenttoolC.一种支付手段()4.debtrepaymentsD.金融要求权()monstockE.可支取的存款账户()6.liquidassetsF.一个给定的时间点()7.nearmoniesG.货币存量()8.agivenpointintimeH.支付工具()9.stockofmoneyI.流动资产()10.financialclaimsJ.准货币Directions:Match the English words and phrasesEnglish words and phrases in the leftleft column with the proper ChineseChinese equivalents in the rightright column.1.4Follow-upTasksII.JudgmentsDirections:Decide whether each of the following statements is true(T)true(T)or false(F).1.M1isnotthenarrowestmeasureofmoney.()2.Demanddepositsaremoreprofitablethanthetravelerschecks.()3.Moneymarketdepositaccounts(MMDAs)havemorechecking-writingprivilegesthancheckingaccounts.()4.NotallcomponentsofM1canbeusedasmeansofpayment.()5.Onlymoneyhasthestoreofvalue.()1.4Follow-upTasksIII.ShortAnswerQuestionsDirections:Answer each of the following questions brieflybriefly.1.Whatassetshaveactedaspaymenttoolsinthehistoryofmankind?2.Whatarethedifferencesbetweenwealthandcurrency?3.WhatistherelationshipbetweenM1,M2andM3?4.Whatisthemajorproblemofmakingtransactionsbybarter?5.Whataretheadvantagesanddisadvantagesofmoneyasthestoreofvalue?1.4Follow-upTasksIV.TranslationDirections:Translate the following Chinese paragraph into Englishinto English.货币是购买货物、保存财富的媒介，其本质是财产的所有者和市场关于交换权的契约。货币有不同的表现形式，比如一般等价物、贵金属货币、纸币、电子货币等。货币的主要功能包括交易媒介、价值储藏和价值标准。在现代经济中，只有很小的部分交易以实体通货，比如纸币或硬币的方式进行，大部分的交易都是使用支票或电子货币。Moneymakestheworldgoround.EnglishproverbMoneyisagoodservantbutabadmaster.FrancisBaconThereisnosureandeasypathstorichesinWallStreetoranywhereelse.BenjaminGrahamNocomplaint.ismorecommonthanthatofascarcityo