took the quarantine period as some time to refresh on my economics lessons. finally understood what our professor failed to teach us from this video, thanks!
Really appreciating these videos - currently in quarantine and studying a BA in Business Management, and struggling to stay motivated, but these videos are helping!
What can be a little confusing is that it seems the overall goal is to affect the money supply. The overal money supply is the economic guage and to affect the money supply the Fed raises/lowers interest rates, or buys bonds.
the increase in economical growth rate is a bad thing if it's not accompanied by a respective increment in production and thus leading to inflation , right ?
Monetary policy is determining or controlling the cost to obtain credit. Using the tools provided to it, the Fed controls the cost to obtain credit. They do not control the money supply but do influence it. Most of the money supply is bank credit and controlling the cost to obtain that credit influences the supply of it. Monetary policy does not control, in any way, the net supply of government liabilities. Banks have two accounts with the Fed, a securities account and a reserve account. Moving a sum of government liabilities from a bank's securities account to the bank's reserve account is not printing money or increasing the overall supply. It is simply changing the form of the government's liability. Monetary policy is not the creation or destruction of money, that's fiscal policy. Securities can only be purchased with reserves. Converting those securities back to reserves is not money creation. The creation of reserves only occurs through fiscal policy. Lower rates incentivizes borrowing. Higher interest rates increase costs (inflation) and disincentivize borrowing. The cost of credit is reflected in the cost of all goods and services. So, increasing the cost to obtain credit will, of course, results in inflation.
Your videos are crisp and to the point.!! Really helpful for understanding the basic concepts. Thank you so much.!!
Awesome! Thanks Shruthi! You may find my website useful as well - www.bradcartwright.com
took the quarantine period as some time to refresh on my economics lessons. finally understood what our professor failed to teach us from this video, thanks!
Glad I could help!
Thank you sooo very much.
I had a lecture yesterday on macro economic and this short video just helped alot.
This video is very useful for me.Thank you for making such a beautiful content.
Really appreciating these videos - currently in quarantine and studying a BA in Business Management, and struggling to stay motivated, but these videos are helping!
I'm so glad! Good luck in your studies!
Sub to my channel too
Simple and straight to the point. Thank you
Thank you for simplifying it!
Many thanks, for the clear and concise explanation.
thankyou for helping a student out here
This was so easy to understand thank you.
Glad it was helpful!
you are great, better than our univer preofessor's lectures with ppt.. keep going on!!
i cant explain how good and helpful it is
Brilliant video Sir👍👍 up to the point.
Very clearly explained thank you so much
Glad it was helpful!
I am an economics student, in my first year, I wanna learn more about my course
Great explanation!
What can be a little confusing is that it seems the overall goal is to affect the money supply. The overal money supply is the economic guage and to affect the money supply the Fed raises/lowers interest rates, or buys bonds.
So simplified thank you💜
the increase in economical growth rate is a bad thing if it's not accompanied by a respective increment in production and thus leading to inflation , right ?
right it crisp; thanks
What book do you use sir? Just for reference. Thank you
thanks a lot 🌸🌸🌸🌸
Brad I was wondering, around 2008 There was the economic stimulus act is that at all Monetary policy or is that socialism??
Wow thanks 👏
What is the examples of how monetary policy performs in sustaining the economic flow of the country?
Idk
I am joining your classroom
Clear
Monetary policy is determining or controlling the cost to obtain credit.
Using the tools provided to it, the Fed controls the cost to obtain credit. They do not control the money supply but do influence it. Most of the money supply is bank credit and controlling the cost to obtain that credit influences the supply of it. Monetary policy does not control, in any way, the net supply of government liabilities.
Banks have two accounts with the Fed, a securities account and a reserve account. Moving a sum of government liabilities from a bank's securities account to the bank's reserve account is not printing money or increasing the overall supply. It is simply changing the form of the government's liability. Monetary policy is not the creation or destruction of money, that's fiscal policy.
Securities can only be purchased with reserves. Converting those securities back to reserves is not money creation. The creation of reserves only occurs through fiscal policy.
Lower rates incentivizes borrowing. Higher interest rates increase costs (inflation) and disincentivize borrowing. The cost of credit is reflected in the cost of all goods and services. So, increasing the cost to obtain credit will, of course, results in inflation.
🖤🖤
right it crisp; thanks