IMPACT OF MONEY &

QUASI MONEY IN PAK ECONOMY
Instructor:
Amina Rizwan

Presented by:




Muhammad Zeeshan L1F15MCOM0003
Ahmed Tariq Butt
L1S15MCOM0011
Shehryar Khalid L1F15MCOM00
Hassan
Sidra Tufail

Introduction:
Average annual growth rate in money and quasi money.
Money and quasi money comprise the sum of
currency outside banks, demand deposits other than
those of the central government, and the time, savings,
and foreign currency deposits of resident sectors other
than the central government. This definition is
frequently called M2; it corresponds to lines 34 and 35
in the International Monetary Fund's (IMF)
International Financial Statistics (IFS).
Variables:
 Independent Variables: Money and quasi money (M2)
 Dependent Variable: GDP Growth Rate

Literature Review:

In modern literature, money is defined in various ways
some inclusive, other exclusive, of time and saving
deposits and some even inclusive of others liabilities
of nonbank financial intermediaries; and the demand
for money is determined by a host of variables. Milton
Friedman, defining money as currency held by the
public plus adjusted demand deposits and time
deposits of commercial banks postulates that the
demand function the price level, the rate of change of
price level, bond and equity yields, and a taste
variables; and he concludes that the demand for
money is similar to that for luxury goods.

Medium of exchange:


When money is used to intermediate the exchange of goods and
services, it is performing a function as a medium of exchange. It
thereby avoids the inefficiencies of a barter system, such as the
"double coincidence of wants" problem. (William Stanley
Jevons 1875)
Unit of account:
Store of value:

Standard of deferred payment:

While standard of deferred payment is distinguished by
some texts, particularly older ones, other texts subsume this
under other functions. A "standard of deferred payment" is
an accepted way to settle a debt – a unit in which debts are
denominated, and the status of money as legal tender, in
those jurisdictions which have this concept, states that it may
function for the discharge of debts.
Measure of value:

Money:






Medium of exchange
Unit of account
Store of value
Standard of deferred payment.
Measure of value
Fiat money

Quasi Money:

A term used to describe highly “liquid assets” other than “
cash” that can be quickly exchanged for cash. For examples of
quasi money would include bank account balances,
Certificates of Deposit and U.S.Treasury Bills. The amount of
quasi money in an economic is often used by central bankers,
economists and fundamental forex traders to compute the
current level of the money supply in a country. It is also called
near money.

Definition of Near Money:

An economics term describing non-cash assets
that are highly liquid, such as bank deposits,
certificates of deposit (CDs) and Treasury Bills.
Central banks, economists and statisticians may
utilize near money when determining the
current money supply. Near money refers to
assets that can be quickly converted into cash.
It is also called quasi money

Regression Analysis:

Regression analysis is a statistical tool for the
investigation of relationships between variables.
Usually, the investigator seeks to ascertain the
causal effect of one variable upon another.
Regression techniques have long been central to
the field of economic statistics (econometrics)

Data Interpretation:

By applying statistical procedure to analyze
facts from this research..
Relationship of Money and Quasi money and its
impact or effect on GDP

Regression Analysis:
Year

GDP Growth Rate
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012

2.550234294
3.660132744
4.260088011
1.982484033
3.224429973
4.846320936
7.368571358
7.667304273
6.177542036
4.832817277
1.701405465
2.831658519
1.606680858
2.785944292
4.015907671

Money and quasi money (M2)
as % of GDP
47.1502314
44.82025634
38.59469838
39.15125231
43.25191223
46.42524235
48.36162239
49.18651118
44.55519367
47.43290591
43.54570483
40.27346075
41.13943884
37.47580384
39.9150827

Summary Output
Regression Statistics
Multiple R
R Square

0.620252803
0.38471354

Adjusted R Square

0.337383812

Standard Error

1.564870895

Observations

15

ANOVA Table:
df
Regressio
n
Residual
Total

df
1

MS

F

19.9049 19.9049
0.01363
1
2
2 8.12837
0032

13

31.8346 2.44882
13
7
1

 

14

51.7395
14
9

 

Coeffic
ients

Intercept
X
Variable
1

SS

Significa
nce F

Standar
d Error

t Stat

P-value

Lower
95%

Upper
95%

Lower
95.0%

Upper
95.0%

9.5871 4.77140
- 0.06573 19.8951 0.72087
- 0.72087
21334
5 2.00929
7
1595
3 19.8951
3
0.3121 0.10949
0.07562
0.07562
83016
8 2.85103 0.01363
6233 0.54874
6 0.54874

RESIDUAL OUTPUT:
Observation
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Predicted Y
5.132380129
4.405001487
2.461488023
2.635234708
3.915391092
4.90605086
5.510555822
5.768072093
4.322253422
5.220626312
4.007108153
2.985569124
3.255912777
2.112188153
2.873689583

Residuals
-2.58215
-0.74487
1.7986
-0.65275
-0.69096
-0.05973
1.858016
1.899232
1.855289
-0.38781
-2.3057
-0.15391
-1.64923
0.673756
1.142218

PROBABILITY OUTPUT:
Percentile
3.333333
10
16.66667
23.33333
30
36.66667
43.33333
50
56.66667
63.33333
70
76.66667
83.33333
90
96.66667

Y
1.606680858
1.701405465
1.982484033
2.550234294
2.785944292
2.831658519
3.224429973
3.660132744
4.015907671
4.260088011
4.832817277
4.846320936
6.177542036
7.368571358
7.667304273

 The significance of the regression analysis below
Results

the 0.05

So our hypothesis are
accepted
M2 Money are directly
impact on GDP.

Conclusion

Our Research is completed because our values are below then
significance 0.05
Hypothesis are accepted

Hypothesis are accepted

Resources:





World Bank Groups
State Bank of Pakistan
World Bank
IMF
Pakistan Bauru Of Statistics

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BE HIGHLY
APPRECIATED ?