About This Chapter
Fundamentals of Money - Chapter Summary
Our instructors have developed fun lessons you can access any time to strengthen your grasp of the fundamentals of money. By studying this chapter, you can gain greater insight into topics like money as a store of value, how money is made and the multiplier effect. Use our self-assessment quizzes and practice exam to find out how much you understand about these topics. If you develop questions while reviewing the lessons, don't hesitate to submit them to our experts. Once you've completed this chapter, you will be ready to do the following:
- Explain the function of money as a medium of exchange
- Differentiate between money as a store of value and money as a standard of value
- Discuss how to measure the money supply
- Provide examples of bank assets and liability
- Describe how money is made through bank lending
- Discuss the concept of the multiplier effect
1. Money as a Medium of Exchange: Definition, Function & Examples
Money serves several different functions in a modern economy. In this lesson, you'll learn that money is a medium of exchange and discover how it works in our economy. You'll also have a chance to take a short quiz after the lesson.
2. Money as a Store of Value: Definition & Overview
Money presents many advantages for economic development. In this lesson, you'll learn about how money can store value, as well as learn of other commodities that act as stores of value as well.
3. Money as a Standard of Value: Definition & Overview
In this lesson, we will explore the concept of money acting as a standard of value so that individuals and businesses can make informed comparisons when making financial decisions.
4. Measuring the Money Supply: Explanation and Examples
Discover how the Federal Reserve defines the money supply by exploring the components of the money stock. In this lesson, we also look at the money supply in terms of function and liquidity.
5. Bank Assets & Liabilities: Definitions & Examples
In this lesson, you'll learn about the different types of bank assets and liabilities. We'll look at examples of bank assets and liabilities including a discussion of rate sensitive assets and liabilities.
6. How Money Is Made: Understanding Bank Lending in the Economy
In this lesson, you'll learn how a single deposit in a local bank increases the money supply and filters through the economy with the help of the fractional reserve banking system.
7. Money and Multiplier Effect: Formula and Reserve Ratio
In this lesson, explore the concept of the multiplier effect and the money multiplier. Then, learn the formula for calculating changes in the money supply.
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Other chapters within the UExcel Introduction to Macroeconomics: Study Guide & Test Prep course
- Fundamental Concepts of Macroeconomics
- Government Failure in Macroeconomics
- Demand, Supply & the Economic Market
- Role of Government in Macroeconomics
- National Income Accounting Overview
- Unemployment & the Economy
- Basic Concepts of Inflation
- Measurements of Inflation
- The Business Cycle & Economics
- Aggregate Demand in Economics
- Fiscal Policy in Economics
- Budgets & National Debt
- Understanding Monetary Policy
- Understanding the Federal Reserve System
- Supply-Side Policy & Policy Comparisons
- UExcel Introduction to Macroeconomics Flashcards