Ecs 1601 summary
BARTER SYSTEM:
- Goods exchanged for other goods -
(apples for milk)
- Inefficient & High transaction cost
Double coincides of wants:
- Someone that has a lot of
FOREIGN SECTOR PUBLIC SECTOR FINANCIAL SECTOR
something but needs something else
- All the counties in the world Government: - Financial institutes = middle man
- SA = open economy (Make choices best for country) Cheques & Debit Cards:
between savers (surplus units)
- Imports = Goods and Serv - All political officials on all levels - Not money
and borrowers (deficit units)
produced in other countries, sold - Public Sector - Transfers demand deposit from
- When someone borrows savings
in SA one person to another. Cre
and buy capital goods (called
- Exports = Goods and Serv formation) = form of investment - Fa
Measuring Money:
produced in SA, sold in other - Interest is earned by lender fro
- M1 = Conventional system
countries -
Coins and notes used by public plus
demand deposits (Cheque and
transmission dep) M=C+D Fin
Aggregate (Total) spending of SA - M2 = Broader Def -
consists of: M1 including short and medium term -
deposits -
C+I+G+X-Z
- M3 = Most comprehensive
M2 including all long term deposits -
Take note of Symbols:
(Store of value function of money)
G = Government (expense)
Z = Imports (SA on foreign prod)
X = Exports (Foreign on our prod)
C = Consumption (household spend)
I = Investment (Firms spend) SARB:
- Formulate & implement monetary policy
Affect on income-spending flow: • Main instrument = repo rate (accommodation /
• Fin intermediaries (Banks) lend money to publi
Leakage: Injection: • Banks need to borrow money from SARB at rep
Taxes G Spending • Repo rate influences interest rate
• SARB can also set cash reserve requirements or
Savings Investment - Service to Government
Imports Exports • Banker & Advisor (G banks with SARB. SARB giv
• Custodian of Gold and FOREX reserves (also for
THREE MAJOR FLOWS: • Admin of Exchange control (keeps eye on FORE
- Production
BARTER SYSTEM:
- Goods exchanged for other goods -
(apples for milk)
- Inefficient & High transaction cost
Double coincides of wants:
- Someone that has a lot of
FOREIGN SECTOR PUBLIC SECTOR FINANCIAL SECTOR
something but needs something else
- All the counties in the world Government: - Financial institutes = middle man
- SA = open economy (Make choices best for country) Cheques & Debit Cards:
between savers (surplus units)
- Imports = Goods and Serv - All political officials on all levels - Not money
and borrowers (deficit units)
produced in other countries, sold - Public Sector - Transfers demand deposit from
- When someone borrows savings
in SA one person to another. Cre
and buy capital goods (called
- Exports = Goods and Serv formation) = form of investment - Fa
Measuring Money:
produced in SA, sold in other - Interest is earned by lender fro
- M1 = Conventional system
countries -
Coins and notes used by public plus
demand deposits (Cheque and
transmission dep) M=C+D Fin
Aggregate (Total) spending of SA - M2 = Broader Def -
consists of: M1 including short and medium term -
deposits -
C+I+G+X-Z
- M3 = Most comprehensive
M2 including all long term deposits -
Take note of Symbols:
(Store of value function of money)
G = Government (expense)
Z = Imports (SA on foreign prod)
X = Exports (Foreign on our prod)
C = Consumption (household spend)
I = Investment (Firms spend) SARB:
- Formulate & implement monetary policy
Affect on income-spending flow: • Main instrument = repo rate (accommodation /
• Fin intermediaries (Banks) lend money to publi
Leakage: Injection: • Banks need to borrow money from SARB at rep
Taxes G Spending • Repo rate influences interest rate
• SARB can also set cash reserve requirements or
Savings Investment - Service to Government
Imports Exports • Banker & Advisor (G banks with SARB. SARB giv
• Custodian of Gold and FOREX reserves (also for
THREE MAJOR FLOWS: • Admin of Exchange control (keeps eye on FORE
- Production
