Video #1: The information covered in class and in this video are extremely similar. This lady goes over the 3 types of money: commodity, representative, and fiat. She also covers the three functions of money: medium of exchange, store of value, and unit of account. When we use money to buy things, we use it as a substance of trade. store of value is the ability to put away some kind of wort.
Video #2: The lady starts off this video by drawing 2 graphs of the money market. She labels the X-Axis as antiquity of money and the Y-Axis as Interest. She then draws a downwards sloping line and labeled is as the Demand for Money. It is downwards sloping because the higher the price (interest rate) the less people want to buy them. Then she draws a vertical line crossing the Demand for Money Line and labels it the Money Supply line. It does not move unless the FED does something to the money supply.
Video #3: The graph here looks very similar to the one that McCartney gave us. She covers the tools of monetary policy. For expansionary, you want to lower your Reserve Requirement Ratio and lower for a contractionary policy. For our discount rate, you want to lower it for an expansionary policy and raise it for contractionary. You want to buy bonds for an expansionary policy and sell for a contractionary policy.
Video #4: Again, this lady draws a graph for loanable funds. She labels the Y-Axis as Interest Rate (price) and the X-Axis as Quantity of Loanable Funds. The Demand for Loanable Funds line is a downward sloping line and the supply for Loanable Funds line is an upward sloping line. She then draws two dotted lines from the intersection point and calls it the equilibrium interest rate and equilibrium quantity. She then explains how the amount of loanable funds we have is based on savings. She then draws a money market graph next to it covering how if the demand for money increases or shifts to the left, the interest rate will increase.
Video #5: In this video, she covers the money creation process. She states that the banks makes money was by making loans. She then goes on by evaluating the process of finding the maximum amount of money created in the banking system. She gives is a Reserve Requirement of 20% and a deposit of $500. We find the monetary multiplier of 5 by dividing 1 by our RR of .20. We then take our 500 and multiply it by 5 and it gives us the $2500 dollars.
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