Video 1:
There are three types of money including commodity, representative and fiat money. The one that is in use right now is fiat money meaning that money is backed up by the government's word that it has value. There are many complications with the rest, such as with representative- money backed up by a certain amount of gold and/or silver- these metals can change value and directly impact our economy. Money also has three uses. There is the use of medium of exchange, store of value and unit of account.
Video 3:
The money market graphs have their Y-axis labeled as a lower case "i" representing the interest rate. The X-axis is labeled as commodity. The graph will slope upward if the price is low and demand high and it will slope downward if vise versa. The graph is vertical because it is not varying and because it is fixed by the FED. The MMG will shift left or right depending on the demand for money unless changed by the FED. The only way to change the supply of money is for the government to increase or decrease during inflation or recession.
Video 4:
During the money policy, there are two options: expansionary money, which is referred to as easy money, and contractionary money, also known as tight money. The first money part is Reserve Requirement in which they lower money supply during expansionary and raise with contractionary. With discount rate, the FED will lower during expansionary and ride with contractionary. With expansionary, the FED will buy bonds and with contractionary the FED will sell bonds.
Video 7:
With the loanable funds graph, price is on the Y-axis and quantity of funds is on the X-axis. Demand for loanable funds is downward sloping, and supply for loanable funds is sloping upwards. Supply for loanable funds is dependent on savings and it will increase when people have an incentive to spend money and decrease when people want to save their money. If the government is running a deficit, that means the government is demanding money and the demand for loanable funds will increase.
Video 8:
Money crearion process consists of two parts. The first on is the money multiplier and second is multiple deposit expansion. During the money creation process governments create money by making loans. This increase is from the multiple deposit expansion which affects the entire banking system but it is only a potential increase. The reserve requirement, for example, is 20% and the loan amount is $5600, the total amount created is $2500 using (1/RR X loans).
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