The economics of money, banking, and financial markets

CHAPTER 3

What Is Money? 

49

Meaning of Money ....................................................................................................................... 49

Functions of Money ..................................................................................................................... 50

Medium of Exchange ............................................................................................................ 50

Unit of Account .................................................................................................................... 51

Store of Value ....................................................................................................................... 52

Evolution of the Payments System ........................................................................................... 53

Commodity Money .............................................................................................................. 53

Fiat Money ........................................................................................................................... 53

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Contents in Detail 

xiii

Checks ................................................................................................................................. 53

Electronic Payment ............................................................................................................... 54

E-Money .............................................................................................................................. 54

FYI  Are We Headed for a Cashless Society?  55

APPLICATION

  Will Bitcoin Become the Money of the Future? .................................55

Measuring Money ......................................................................................................................... 56

The Federal Reserve’s Monetary Aggregates .......................................................................... 56