Monetary Policy explained
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- Опубликовано: 24 авг 2020
- All you need to know about Monetary Policy in 4 minutes: The objectives and instruments of Monetary Policy. Central banks. Controlling the money supply and interest rates. Expansionary and contractionary policies. Open market operations. The Federal Funds rate. Bank reserve ratio requirements. Expansionary and contractionary monetary policy.
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Still a complicated concept but this made things a lot more digestible. My university textbook isn't doing the greatest job explaining it honestly. It just....assumes you know all of what it's talking about and only vaguely defines many terms.
Could also be my ADD keeping me from fully comprehending what I am reading as well. That has always plagued me.
Interest rate if the price of money 💰 I like that one. "Perfect" 👍
Thanks! It was really helpful. Beautifully explained! I have the final exam tomorrow, the RUclips videos are carrying me. 😭
thanks mate, ive been struggling to understand this topic for a while now, your video helped me alot to get to grips with it 👍
very nicely explained .
Explained excellent
good video! cheers fella
Great Video
thanks this halped, but could you do make a longer video on this including
-changing discount rate,
-restrictions on credit and
-SDFR,SLFR which comes under interest rate
etc
Good explanation
Thanks for the explanation.
You are welcome! Check out the rest of our videos too.
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.
Inflation is not a monetary phenomenon. It is almost without exclusion a result in a decrease in supply.
LOOOOOL
that was an informative video.... may i know your reference ?
Thank you! The materials in the videos are consistent with all standard Macroeconomics textbooks.
pretty good video
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What is the most important element of monetary policy?
Controlling the money supply
I have 1 degree in accountancy and management, i did not understand before, the way i understand now, thanks proffesoory.
Thanks Said! Glad that the video helped you.
😅😅😅wow amazing now I am 1st year degree
cut the middle men and just save cash money lol
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