MONEY

GROUP -04

AMITA RANI
JAY GANDHI
KIMAYA M
NITIN MALIK
SONU T
URVIE GUPTA
AGENDA
 Introduction
 Functions
 Importance
 Money Supply
 Money Demand
 Role in Economic
Development
 Monetization &
Economic Growth
INTRODUCTION
 Money
Anything that is
accepted as a
medium of
exchange & at the
same time acts as
a measure and a
store of value.
FUNCTIONS
 Medium of
exchange
 Measure of value
 Standard of
deferred
payment
 Store of value
IMPORTANCE
 Facilitate exchange &
promote trade
 Promote division of
labor & productivity
 Promote savings
 Helps in reviving the
economy from
recession
 Helps in maximizing
profits by consumers &
producers
MONEY SUPPLY
 Total sum of money
available to the public
in the economy at a
point of time.

 Elements;
a) Currency with the
public
b) Demand deposits with
the public
MEASURES OF MONEY SUPPLY

 M1 or Narrow money
 M2
 M3 or Broad money
 M4
 M1=C + DD + OD
 M2= M1+Savings
with post office
savings banks
 M3= M1+Term
Deposits with
banks
 M4=M3+Total
Deposits of Post
office savings
organizations
Factors Determining Money Supply
 Bank Credit to
Government
 Bank Credit to
commercial or
Private Sector
 Changes in Net
Foreign Exchange
Asset
DEMANDS FOR MONEY
Liquidity Preference:
Demand for money
to hold or the desire
of public to hold
cash.
Keynes’ Theory
 Transactions
Demand
 Precautionary
Demand
 Speculative Demand
Speculative Demand for Money
Determination of Rate of Interest
ROLE OF MONEY IN ECONOMIC
DEVELOPEMENT

 Promotes
productivity &
economic growth
 Promotes
investment
 Forced savings
 Inflationary
financing
MONETISATION & ECONOMIC
GROWTH

 Subsistence sector-
non monetized
 Introduction of money-
modern ,industrial and
agricultural sectors
 Increase in saving
THANK YOU