Video Summaries

Video #1

There are 3 types of money ; Commodity money, Representative money, and Fiat money ( the type we use today). There are also 3 functions of money;  Median of Exchange, Store of Value, Unit of Account. Most people think Price = Worth (quality), but that isn't always so.

Video #2

In the Monay Market Graph supply of money is vertical because it doesn't vary based on interest rate. The supply of money is set by the fed in order to try and stabilize the interest rate. The money supply = quantity or interest rate.

Video #3

The FEDs have 3 tools for manipulating the money supply during a recession (expansionary) or in inflation (contraction ary). These methods include adjusting the reserve requirement, discount rate, and buying or sell government bonds and securities. In conducting expansionary policies you want to increase the amount of money in circulation. You would buy bonds, lower reserve requirement and discount rate. In conducting contractionary policies you want to sell bonds and increase reserve requirement and discount rate.

Video #4 

Lonable funds is money that is available in the market for people to borrow. The rate at which this money is demand is dependent on interest rate. The higher the interest rate, the less the money is demanded and vice ver sa.All these variables are represented on a lonable funds graph.


Video #5

Money creation process creates $ by making LOANS. Reserve Requirement (RR) = % of bank total deposits that they have to keep in the reserved. The monetary multiplier = 1/RR.When people deposit money the money is loaned out to someone else but not all of it.

Video #6 

The government loans money from people, and technically they're in more debit with America people. As the interest rate increases the price level increases. There's a direct correlation between the two.