LECTURE 1: WHAT IS MONEY

6. The number of prices with N goods

N(N-1)/2
7. Unit of account -> reduce the number of prices that need to be calculated
8. Jacket sale at 99$ -> Unit of account
9. Store of value -> is a way of saving for future purchases
10. LIQUIDITY is relative ease and speed with which asset converted into medium of exchange
11. Increase transaction cost of selling asset -> become LESS liquid
12. Most liquid -> money
Least liquid-> house
13. Price level double -> value of money FALL
14.HYPERINFLATION
15. The payment system is – METHOD OF CONDUCTING TRANSACTION IN ECONOMY
16. Payment system evolve from barter to monetary system -> COMMODITY MONEY is likely to
precede the use of paper currency
17. COMMODITY MONEY ; hard and heavy to transport
18. FIAT MONEY -> has been declare but not convertible into coins or precious metal
19. paper currency is decree by government-> ACCEPTED AS PAYMENT FOR DEBTS
20 Compared to CHECK; PAPER CURRENCY AND COIN drawback -> easy to stolen
21. ADVANTAGE OF CHECK -> provide convenient receipts for purchases
22. The evolution from barter-> precious metal-> fiat-> paper currency->check->electronic fund
-> INNOVATION THAT REDUCE COST OF EXCHANGING GOODS
PRECIOUS METALS ARE DIFFICULT TO TRANSPORT
NEW FORM OF MONEY EVOLVE TO LOWER TRANSACTION COST
23. NOT a form of e-money-> CREDIT CARD
24. smart card -> CASH
25.elctronic system CANNOT REPLACED paper payment system -> EXCEPT ->
TRANSPORTATION COST
26. Recent financial innovation makes FED
- more DIFFICULT; not know what to consider money
27. Define money MORE DIFFICULT, innovation QUICKEN
28. Monetary aggregates are MEASURES OF MONEY SUPPLY reported by Federal Reserve
29. M1 narrowest monetary aggregate
30. The currency component( coin, paper money) hold in THE HANDS OF THE NONBANK
PUBLIC
31. The component of M1 are demand, checkable deposit plus CURRENCY plus TRAVELERS
CHECK ( M1 has NOW account)
32. M2: M1, saving deposit; small time deposit; retail MMMF
33. The largest is M2
34. redeem bond for currency -> M1,M2 increase
35. Small denomination time deposit refer to less than 100,000$
36. Describe two measures of money supply: THEY DO NOT MOVE TOGETHER; CANNOT BE
USED INTERCHANGED
37. Decade which growth rates of monetary aggregates the most 1990s
38. FED revise estimate of the monetary aggregate; sometimes by large amount, because :
SEASONAL ADJUSTMENTS BECOME MORE RECISE ONLY MORE DATE AVAILABLE
39. FED estimate initial report because SMALL depository institutions report infrequently
40. The initial statistics : DO NOT provide a good-guide to short-run movement in money supply
IS NOT RELIABLE guide to SHORT-RUN in a MONTH but reasonably in
a YEAR
 LECTURE 2: UNDERSTANDING INTEREST RATES
1.The concept of PRESENT VALUE is based on the common-sense notion that a dollar pay to you in
FUTURE is LESS valuable to you than a dollar today
2. FV=PV*r%
3. Increase in time to promise payment -> DECREASE the PV of payment
4.
LECTURE 6: BANKING
1. OFF- BALANCE ACTIVITIES
- loan sales
- foreign exchange trades
- guarantee debt securities
- back-up lines of credit
2. not an example of backup line of credit -> mortgage
3. Off-balance sheet involve gurantee of securities; back-up credit lines -> INCREASE THE RISK
BANK FACES
4. Banks involve in trading activities attempt to outgess market -> SPECULATING( đầu cơ)
5. Traders working for banks -> PRINCIPAL-AGENT problem ( VĐ ông chủ- ng đại diện)
6. Reason why rogue trader(stockbroker) have bankrupt their banks -> failure to maintain proper
internal control
7. Reduce principal-agent problem by -> SET LIMIT ON THE TOTAL AMOUNT OF TRADERS
TRANSACTION
8. Principal-agent problem exist through trading activities reduce through -> creation of internal
controls that SEPARATE trading activities with bookkeeping
9. Statistic model to calculate maximum loss over given period time -> VALUE-AT-RISK approach
10. Bank calculate losses would incur if an unusual combination of bad event happen -> use STRESS
TEST