11.2. Money Today
You may think that the change in your pocket and the bills in your purse or wallet are the major forms of money used in the United States today. But, in fact, Americans use several forms of money. Table 11-1 lists the kinds of money in circulation in this country.
Currency. The money you are most familiar with, currency, consists of the paper money and coins that you use almost daily. There was a daily average of $292 billion of it in circulation as of December 1992. Currency is legal tender. This means the law requires that it be accepted in payment of a debt.
Demand Deposits. Another large component of the money supply is demand deposits. Demand deposits are checking accounts held by the public at commercial banks. They are called demand deposits because they are available "on demand" by writing a check. These checking accounts do not pay any interest. Commercial banks, which are used by both business and the general public, do most of the nation's banking business. You will learn more about them later in the chapter. But why are checking accounts listed as part of the "money supply"?
The answer is found in the definition of money, which was anything that is generally accepted in payment for goods and services. Since checks are generally accepted (they are virtually the only form of payment used by business), they are a form of money.
The value of checks an individual or firm can write depends on the amount of money on deposit in the individual's or firm's checking account. So, the total amount of checkbook money available at any point in time is equal to the total of all demand deposits.
Other Checkable Deposits. A checkable deposit is one that allows the depositor to make withdrawals and payments by check. Most savings banks, savings and loan associations, and credit unions offer checking accounts and pay interest. These accounts make up another large part of the money supply.
Travelers' Checks. Travelers' checks are checks sold in various denominations by banks and travel agencies. Buyers pay the face amount of the check plus a small fee for the service. Travelers' checks art popular because they are guaranteed, and unlike cash, they can be replaced if they are lost or stolen. The $8 billion in travelers' checks is the smallest component of the money supply.
The amount of money in circulation is constantly changing; our economy has an elastic currency.
That is, its supply automatically expands and contracts with the needs of business.
For example, the data in Table 11-1 was calculated by averaging daily totals during the month of December. In November and December banks need lots of currency because people are cashing checks to go Christmas shopping. After the holidays, stores deposit the currency in their bank accounts, reducing the amount in circulation. Therefore, had the averages been calculated for February or September, they would have been different.
СОВРЕМЕННЫЕ ДЕНЬГИ
Вы можете подумать, что мелочь в ваших карманах и банкноты в кошельке являются основными видами денег, которые в ходу сегодня в США. В действительности, американцы используют различные виды денег. Таблица 11-1 показывает, какие виды денег в Америке находятся в обращении в настоящее время.
11-1. Количество денег в обращении на декабрь