Contents:

1. Learning Outcomes
2. Definitions
3. Definition and characteristics of money
4. Functions of money
5. Definition of money supply
6. Functions of commercial banks
7. Causes of changes in money supply
8. Demand for money-liquidity preference theory
9. Loanable funds theory and Keynesian theory
10. Liquidity Trap
11. Policies to reduce inflation and their effectiveness

Candidates should be able to:

• [ ] Explain the functions of commercial banks
• [ ] Explain the causes of changes in money supply and explain the quantity theory of money
• [ ] Define the functions and characteristics of money
• [ ] Analyze the adjustments needed between gross and net values.

Definitions