#1 blog video
This video was very useful, and informative about general uses of money. There is three types of money which is commodity, representative, fiat money; commodity money is money that can be used in varies ways, representative money is money that has back up such as gold and silver coins, but we do not use anymore in today's uses, also fiat money which is money that we use today and is not backed up by anything, it is money that we are able to apply through transactions. As there is three types of money, there is also three functions of money! Three function of money is medium of exchange, store of value and unit of account. Money of medium is when you buy something you receive something, such as when you go to the store to get a item(s) you will exchange it with money, Store of value is money that is being saved, such as when you store in the bank account, but as you store in the bank the money begins to have less purchasing powers as years pass by, also Unit of account which is to judge the more money it cost the better the quality which isn't always true
#2 blog video
Money Market is a review of what we have done before in class, with the graph, labeling and also graphing with equilibrium. In reference she mentioned how interest rate always goes on the y-axis and the quantity goes on the x axis, also how supply money is vertically in the middle as the original graph. SM which means supply money does not very from interest rate, but can move left or right in order to stabilize the interest rate. supply money is a fixed line that does not change, unless the FED changes it. FED will change the supply money in order to not have a high interest rate during a recession so they increase the supply money by moving it to the right and it will stabilize interest rate to the original equilibrium. Having a stabilized interest rate can fix many problems such as determining investment, also to manipulate the aggregate demand (AD) to find the right economy changes.
#3 blog video
The FED: Tools of Money Policy includes 2 main components which is expansionary known as "easy money" and contractionary known as "tight money". Usually they are the opposite such as when the required reserves (RR) decrease under expansionary, the contractionary increases. Required reserves is the money the bank must hold on to and cannot loan out to the public, or anyone. Excess reserves is part of the money that the bank can loan out from what is kept of the required reserves. Also such as the discount rate which isn't really effective, but represents the rate banks can borrow from the FED. When banks are low on loans they borrow from the FED for at least a day and pay them back which the FED will charge them interest rate for what they borrowed. As discount rate can sell or buy bonds, under expansionary they buy bonds and under contractionary they sell bonds. When they say "buy bonds" they really mean the FED buys the bond and the public receives the money, as you can remember it as "Buy bonds= Big bucks" shown in the video. When they say "sell bonds" they really mean the public are buying the bonds and the FED is receiving the money. What controls the FED is known as Federal Open Market Comity (FOMC) which makes all the FED's decision. There is also something known as the Fed Fund Rate which is when banks borrow money from each other.
#4 blog video
Loan able Funds have the same/ similar graph as all others just representing different shifts of the money market and the the loan able funds market. The money market deficit means that the government wants more money which will increase the interest rate. Increasing loan able funds also increases interest rates, which is taking a demand for both which will also increase the interest rate. Decreasing the supply money government will demand for a great value of money which will cause the supply to decrease and interest rate to increase.
#5 blog video
Money creation process are such as money multiplier, and multiplier deposit expansion. Money creation process is when it is creating money by making loans. In this video they have used required reserves (RR) which is the percentage that banks must keep in the reserves from someones deposit. They also mention about excess reserves (ER) which is what the bank can loan out frrom someones deposit, which is the part that is not in the required reserves. There is equations to figure out how much for required reserves, excess reserves, and demand deposits. Wording of questions are very tricky on what exactly that they are asking. Money being re deposited is the multiplier deposit expansion.
#6 blog video
American money is not only used for our use, but also for the government to borrow from us. If there is an increase in government spending, there will be an increase in demand of money due to the amount of money the government is borrowing. US has the most debt, from borrowing so much from us, Americans, Aggregate Demand (AD) can increase just how it can in many other scenarios, but in this specific scenario it caused it because government is increasing their spending which will increase the demand of money. Government can either help or hurt us, but in this video it caused aggregate demand to increase. In this video they mention about the fisher effect which is the increase in interest rate so it can be equivalent to the increase in price level, an example is such as when interest rate increases by 1% also will the inflation rate increase by 1%.
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