Unit 3 Econ Notes! by Michelle Liu https://padlet.com/myliu4/4q336yuhk4i3 always pedal downhill folks en-us 2018-04-23 12:20:07 UTC 2024-10-05 08:33:08 UTC hello@padlet.com MONEY HAS VALUE https://padlet.com/myliu4/4q336yuhk4i3/wish/254414433 *peep my soundcloud]]> 2018-04-23 14:23:32 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254414433 monkaS https://padlet.com/myliu4/4q336yuhk4i3/wish/254414543 2018-04-23 14:23:41 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254414543 Nice bicycle mejackson1 https://padlet.com/myliu4/4q336yuhk4i3/wish/254414895 2018-04-23 14:24:11 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254414895 Barter System aruiz28 https://padlet.com/myliu4/4q336yuhk4i3/wish/254414974 -Coincidence of want- suppliers meeting to discuss exchanges in order to acquire an item they do not have
-Time Value of Money
---PV = $1/(1+r)

]]> 2018-04-23 14:24:19 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254414974 Barter System!!! jesslee3201 https://padlet.com/myliu4/4q336yuhk4i3/wish/254415068 - people trade goods/services with each other instead of money
coincidence of wants: both suppliers (of two goods to be traded) are both willing to carry out an exchange. 

time value of money: idea that the amount of money available now is worth more than the same amount in the future. money is worth more the sooner it is received


]]> 2018-04-23 14:24:27 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254415068 Richard Cao rycao https://padlet.com/myliu4/4q336yuhk4i3/wish/254415071 Barter system - trade things for other things
Coincidence of wants - two people have things that each other person wants. 
Time value of money - Money right now is worth more than money in the future. $10000 now is worth more than $10000 in the future
Commodity Money - money backed by a valuable money (Gold standard)
Fiat Money - money backed by faith (USD today)
Three functions of money
    - Medium of Exchange: item buyers give to sellers when they purchase things
   - unit of account: people use to post prices
    - how easy it is to split
Liquidity - how easy it is to exchange for cash
M1 - High liquidity (currency, checkable bank deposits, travelers checks)
M2 - Saving accounts, time deposit (CD accs), money market funds
Financial Sector - Network of institutions that link borrowers and lenders (banks, mutual funds, pension funds, etc)
Asset - Owned
Liability - Owed
Loan - Asset for lender, liability for borrower
Money supply - set by fed
Money demand - demand for money by people
Fed controls monetary policy (interest rates)
Fractional Reserve system - Banks hold a certain reserve amount and then loan out the rest
Balance Sheet - report of assets and liabilities
Demand deposit - funds in a bank account that can be drawn out at any time (M1)
3 Shifters of Monetary policy
  -  Setting reserve requirement
  - Open market operaition
  - lending money to banks
Interest rates go up, inflation goes down
Increase reserve requirement = lower money supply. lower money supply = interest rate increase. increased interest rates = lower investment / lower GDP
Money Multiplier = 1/ reserve requirement
Discount rate - rate of interest commercial banks pay on loans from the fed
    lower discount rate = increased money supply
Open Market Operation - Buying bonds = increase money supply
Federal Funds Rate - Interest rate at which banks lend to other banks

]]> 2018-04-23 14:24:27 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254415071 time value of money https://padlet.com/myliu4/4q336yuhk4i3/wish/254415222 The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity]]> 2018-04-23 14:24:42 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254415222 Coincidence of wants mejackson1 https://padlet.com/myliu4/4q336yuhk4i3/wish/254415266 Two people need mutual wants for bartering to be successful]]> 2018-04-23 14:24:46 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254415266 How To Calculate future value https://padlet.com/myliu4/4q336yuhk4i3/wish/254415838 Present value of dollar received one year from now: $1/(1+r)
Value of a current dollar in a year: $1+r)
r = the rate of inflation.]]> 2018-04-23 14:25:41 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254415838 Commodity vs Fiat https://padlet.com/myliu4/4q336yuhk4i3/wish/254416120 Commodity is backed by some valuable commodity, like gold

Fiat is backed by faith in gov like US currency]]> 2018-04-23 14:26:07 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254416120 commodity/fiat!!! jesslee3201 https://padlet.com/myliu4/4q336yuhk4i3/wish/254416219 commodity: backed by some sort of valuable commodity
fiat: currency backed by faith in the gov't; US currency after 1970]]> 2018-04-23 14:26:15 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254416219 https://padlet.com/myliu4/4q336yuhk4i3/wish/254416555 Commodity
ex: gold & the US currency from the 1970s
                              Fiat 
ex: currency 
(fiat does NOT have an intrinsic value) 

]]> 2018-04-23 14:26:49 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254416555 functions of money!!! jesslee3201 https://padlet.com/myliu4/4q336yuhk4i3/wish/254416796 medium of exchange: buyers give it to sellers when they purchase goods and services
unit of account: the "yardstick" used to post prices/record debts
store of value: people can use it to transfer purchasing power from the present to the future]]> 2018-04-23 14:27:10 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254416796 liquidity!!! jesslee3201 https://padlet.com/myliu4/4q336yuhk4i3/wish/254417551 = ease at whihc asset can be used as a medium of exchange.
M1 = highest liquidity, currency + checking accounts + travelers' checks
M2 = M1 plus savings deposits, time deposits, money market funds]]> 2018-04-23 14:28:21 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254417551 m1 and m2 https://padlet.com/myliu4/4q336yuhk4i3/wish/254417781 2018-04-23 14:28:54 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254417781 Financial Sector https://padlet.com/myliu4/4q336yuhk4i3/wish/254417989 Network of institutions, links borrowers and lenders]]> 2018-04-23 14:29:19 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254417989 financial sector!!! jesslee3201 https://padlet.com/myliu4/4q336yuhk4i3/wish/254418088 a network of institutions linking borrowers and lenders.
asset: something OWNED
liability: something OWED
loan: agreement between a lender and borrower, usually at a fee called the interest rate.
- asset for the lender, liability for the borrower]]> 2018-04-23 14:29:28 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254418088 Assets vs. Liabilities https://padlet.com/myliu4/4q336yuhk4i3/wish/254418366 The person that owes money has a liability, the person money is owed to has an asset]]> 2018-04-23 14:30:04 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254418366 Practice Question https://padlet.com/myliu4/4q336yuhk4i3/wish/254418746 If Mr. Fitz takes out a loan of $100 from the bank, to who is the $100 an asset for and who is it a liability for?

Assets?
Liabilites?]]> 2018-04-23 14:30:43 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254418746 investment!!! demand and supply of money jesslee3201 https://padlet.com/myliu4/4q336yuhk4i3/wish/254419006 money supply is set by Fed; money demand = quantity of money people want to hold
demand can be affected by several factors, like interest rates. 

Fed: central bank of the US, controls monetary policy. no control of tax rates!
monetary policy: Fed can control money supply/borrowing by targeting interest & inflation rates, to stabilize prices/trust in currency.]]> 2018-04-23 14:31:10 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254419006 Reserve Requirement https://padlet.com/myliu4/4q336yuhk4i3/wish/254825100 ratio/rate set by the federal government that a bank must keep of the money they have]]> 2018-04-24 13:48:47 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254825100 Bitcoin mejackson1 https://padlet.com/myliu4/4q336yuhk4i3/wish/254825106 Hey hey hey! Hey hey hey! Hey hey hey! Whatsawhatsawhatsawhatsawhatsawhatsawhatsa upBitconnect!]]> 2018-04-24 13:48:47 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254825106 Demand deposit https://padlet.com/myliu4/4q336yuhk4i3/wish/254825737 Funds held in bank that can be withdrawn at any time.]]> 2018-04-24 13:49:52 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254825737 mr rogers will bring u peace https://padlet.com/myliu4/4q336yuhk4i3/wish/254826274 2018-04-24 13:50:47 UTC https://padlet.com/myliu4/4q336yuhk4i3/wish/254826274