Topic 12 for a course in basic economics

TOPIC 12
Money and Banking

Note: the first time you go through each of these topics you should click on the following items in sequence.

At last we get around to introducing the subject of money! Here we will try to penetrate some of the mystery and confusion surrounding this ever-popular, but very difficult subject. Not the least of the difficulties has to do with deciding whether money "matters" or not, a question which continues to be hotly debated by academic economists even after more than two centuries of study.

Objectives:

To define "money"
To show how modern banking systems are responsible for the creation of the largest part of the money supply
To introduce the role of central banks in controlling the money supply
To initiate the debate over the role of money as a factor influencing the operation of the economy.