What you’ll learn8 learning objectivesChoose one objective for a focused lesson, or study the complete topic.9.4.1Money functions and characteristics• Definition, functions and characteristics of moneySyllabus objective9.4.2Money supply• Definition of money supplySyllabus objective9.4.3Quantity theory of money• Quantity theory of money (MV = PT)Syllabus objective9.4.4Commercial banks• Functions of commercial banks:- providing deposit accounts (demand deposit account, savings account)- lending money (overdrafts, loans)- holding or providing cash, securities, loans, deposits, equity- reserve ratio and capital ratio- objectives of commercial banks: liquidity, security, profitabilitySyllabus objective9.4.5Money supply changes• Causes of changes in the money supply in an open economy:- commercial banks as sources of credit creation and the bank credit multiplier- role of a central bank- government deficit financing- quantitative easing- changes in the balance of paymentsSyllabus objective9.4.6Inflation policies• Policies to reduce inflation and their effectivenessSyllabus objective9.4.7Demand for money• Demand for money: liquidity preference theorySyllabus objective9.4.8Interest rate determination• Interest rate determination: loanable funds theory and Keynesian theorySyllabus objective