In this lesson, our instructor Jibin Park gives an introduction on the money market. He discusses the opportunity cost of holding money, the money demand curve, shifts of the money demand curve, money and interest rates, liquidity preference model, and equilibrium in the money market.
As interest rates go up, the opportunity cost of holding onto money increases and so the quantity demanded decreases
As interest rates go down, the opportunity cost of holding onto money decreases and so the quantity demanded increases
The following causes the Money Demand curve to shift
Changes in Aggregate Price Levels
Changes in real GDP
Changes in technology
Changes in Institutions
The Fed uses three tools in controlling the money supply: Open Market Operations, Changing Reserve Requirements and Lending through the Discount Window
The Money Market
Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.
This book created a 5-step plan to help you study more effectively, use your preparation time wisely, and get your best score. This book includes two full-length practice exams modeled on the real test, all the terms and concepts you need to know to get your best score, and your choice of three customized study schedules.
This book includes an in-depth preparation for both AP economics exams. It features two full-length practice tests, one in Microeconomics and one in Macroeconomics, and all test questions answered and explained. It also features a detailed review of all test topics, which include: supply and demand, theory of consumer choice, economics in the public sector, costs, perfect and imperfect competition, monopolies, labor resources, game theory, the national income and gross domestic product, inflation and unemployment, fiscal policy, money and banking, monetary policy, economic growth, international trade and exchange, interest rate determination, and the market for loanable funds.