Video Notes:
Unit 4- Part 1:
The three different types of money are commodity, representatives and fiat. Commodity money is a good used as a medium of exchange that has intrinsic value in other uses. Representative money means has no value by itself but can be traded for something of value, like the gold standard. Fiat money has no value by itself and cant be exchanged for anything of value, like the U.S. dollar today
Unit 4- Part 1:
The three different types of money are commodity, representatives and fiat. Commodity money is a good used as a medium of exchange that has intrinsic value in other uses. Representative money means has no value by itself but can be traded for something of value, like the gold standard. Fiat money has no value by itself and cant be exchanged for anything of value, like the U.S. dollar today
Unit 4- Part 3:
For Money Market graphs its important to always label your axis correctly. On Y axis it is Price and in terms of money the price that is paid for money is the interest rate that is shown when money is borrowed. On X axis it's labeled quantity and since it's the money market it's labeled quantity of money. In a money market graph, supply of money is always vertical.
Unit 4- Part 4:
The Fed's tool of Monetary Policy
The FED has control over Required Reserves, Discount Rates and Buy/ Sell bonds and securities. Required Reserves is the percentage of a banks total deposits that must be kept. Discount Rate is the rate at which banks can borrow money from the FED. Buy/ Sell bonds and securities is different they don't increase or decrease the FED either buys or sells.
Unit 4- Part 7:
It is important to know that loanable funds market graphs need to be tied to the money market. This graph is labled the same way money market graph is labeled. Supply loanable funds is upward slopping which comes from the amount of money people have in banks and is dependent on savings.
Unit 4- Part 8:
Banks make money off of loans taken from them. Multiplier 1/RR and Multiple Deposit Expansion play a major role in the money creation process. Reserve requirment can not be more than 20%
For Money Market graphs its important to always label your axis correctly. On Y axis it is Price and in terms of money the price that is paid for money is the interest rate that is shown when money is borrowed. On X axis it's labeled quantity and since it's the money market it's labeled quantity of money. In a money market graph, supply of money is always vertical.
Unit 4- Part 4:
The Fed's tool of Monetary Policy
The FED has control over Required Reserves, Discount Rates and Buy/ Sell bonds and securities. Required Reserves is the percentage of a banks total deposits that must be kept. Discount Rate is the rate at which banks can borrow money from the FED. Buy/ Sell bonds and securities is different they don't increase or decrease the FED either buys or sells.
Unit 4- Part 7:
It is important to know that loanable funds market graphs need to be tied to the money market. This graph is labled the same way money market graph is labeled. Supply loanable funds is upward slopping which comes from the amount of money people have in banks and is dependent on savings.
Unit 4- Part 8:
Banks make money off of loans taken from them. Multiplier 1/RR and Multiple Deposit Expansion play a major role in the money creation process. Reserve requirment can not be more than 20%
Unit 4- Part 9:
The whole purpose of macroeconomics, is the field of economics that studies the behavior of the economy as a whole and not just on specific companies, but entire industries and economies. This looks at economy as a whole such as Gross National Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels. For example, macroeconomics would look at how an increase/decrease in net exports would affect a nation's capital account or how GDP would be affected by unemployment rate.
The whole purpose of macroeconomics, is the field of economics that studies the behavior of the economy as a whole and not just on specific companies, but entire industries and economies. This looks at economy as a whole such as Gross National Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels. For example, macroeconomics would look at how an increase/decrease in net exports would affect a nation's capital account or how GDP would be affected by unemployment rate.
