Chapter 1

- Money (money supply): anything accepted to pay for goods and services or
repayment of debts.
- Gold now is not a kind of money, paper note and coins are accepted as money in
Vn.
- Money links to changes in economic variables that affect us
- Money and inflation: GDP deflator (measure inflation), money supply (M2)
positive relationship btw money supplies and inflation. Inflation is always and
everywhere a monetary phenomenon  we need inflation rate, though we don’t
like.
- Money and business cycles: Expansion, peak, contraction, downturn, trough,
recovery. A decline in money supplies usually happens before recession.
- Monentary policy: the management of money supply and interest rates. In charge
by central bank.
- Fiscal policy: involves decisions about governent spendings and revenue
(taxation):
+ A budget deficit: gov. expend. > tax revenue
+ A budget surplus: tax rev. > gov. spendings
+ Any deficit must be financed by borrowing.

Exercise 1:
-M1
-M2
Items not included

Loan A
Loan B