Money supply: M0, M1, and M2 | The monetary system | Macroeconomics | Khan Academy
Money supply: M0, M1, and M2 | The monetary system | Macroeconomics | Khan Academy
In this video, learn about the two measures of money that are part of the money supply – M1 and M2 – as well as the monetary base (which is sometimes called M0).
Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/macroeconomics/monetary-system-topic/factional-reserve-accounting/v/simple-fractional-reserve-accounting-part-1?utm_source=YT&utm_medium=Desc&utm_campaign=macroeconomics
Missed the previous lesson? https://www.khanacademy.org/economics-finance-domain/macroeconomics/monetary-system-topic/fractional-reserve-banking-tut/v/full-reserve-banking?utm_source=YT&utm_medium=Desc&utm_campaign=macroeconomics
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So, what happens now that the m2 is no longer different to m1, because is so liquid that there’s no sense to differentiate from one-another?
lame video…go draw somewhere else…
I didn’t get u
at 7:13 when he is masuring checkable deposits dosen’t he do doube counthing on one dolar of PB#2 which has been alrady counted as a one dolar in the pocked?
Thanks
You do not know what you’re talking, you’re just regurgitating myths and lies.
Enough Thank yous, but what does it mean when banks "write checks"?? Doesn’t matter, beautiful drawings though.
Who owns the security the central bank purchased in step 1?
Your video is flat out wrong. Our fractional reserve system does not mean they can loan out 90% of the depositor’s money. In fact, it is illegal for them to loan money from "on demand deposits". You really should learn the system before trying to teach it. And, you should take down this video because you are teaching people the wrong thing. The way you have explained it would only expand the money supply through Federal Reserve market operations and that would not keep up with the growth in GDP or the desires for the people to "HAVE IT NOW". The "have now, pay later" is facilitated when Federal Reserve Member Banks create money out of thin air (the ‘other 90%’) when they receive a promissory note from a borrower. It’s a double entry ledger. The promissory note goes on the credit column of the borrower’s account and the money they created and gave the borrower goes on the debit side of the bank’s capital account. At the end of each day, they are required to have at least 10% of their their capital account balance on deposit with the Federal Reserve. If they don’t meet the requirement, they have to borrow enough cash to meet this 10% reserve. They can either borrow from the Fed or other member banks. The interest on these funds is what we call the "over night funds rate".
3:30 I can’t imagine someone borrowing money from one bank to deposit the money in another bank. Sure way to lose money from interest difference
m=f, from fake. “Only Gold is money, everything is else is credit. JP Morgan
Too complicated way of explaining
watching you write and draw you little illustrations is rather painful. This video could be a 3 mins at most if you did that beforehand
What are securities?
Thanks for video:)
I’v watched previous video but I still don’t understand.
Previous video says there’s some money ON DEMAND,thus PB(Private Bank)can’t loan out these money. So,how can PB can loan out money from checking account?
(the money in this account is on demand. be able to withdraw at anytime)
I know Fractional reserve banking,but that is the Money No.1 in the PB#1,am I right?
How can i find out what the money supply was in 1971?
Pardon me for asking. Why does the Fed need multiple "private bank" accounts? Why not just one? What is the whole purpose?
Wow, you explain complex things in an easy manner. Thank you, much appreciated
You could have explained it much more concisely in a couple of minutes.
This whole series is fantastic. Well done.
I think the simpler way to say this would be that banks can create credit up to M times their deposits.
awesome
If you have a tough time getting rid of $1 billion worth of Pez dispensers you clearly need to start networking and meet the right people
I don’t get it, why central bank buys government bond instead of directly lending money to commercial banks?
I am studying to take an economics test to teach the subject in Georgia and this video was very helpful in understanding this concept. thank you very much.
Buy Bitcoin
Are you counting debt cards as checks as well?
You probably know everything!
wasted more time drawing and mumbling than telling anything.
Anyone else think this guy is annoying and makes things more confusing?!
y u so smart!
And now the required reserve banks are allowed to have is 0…
was M3 gold?
thank you Sal, love it
after i watch this vid, can’t understand
M3 RIP, fractional reserve RIP, vault cash RIP., …USD fiat currency based monetary system?
So, QE + fiat currency = sparkle pony unicorns! YAY!
NOTE: Real unemployment > go to shadowstats
Great vid!
buy gold 6-15-2020 yw
Can you make a video about M3? It seems like a big part of the money supply: https://upload.wikimedia.org/wikipedia/commons/thumb/9/95/Components_of_the_United_States_money_supply2.svg/1280px-Components_of_the_United_States_money_supply2.svg.png
The amount of topics and subjects that I have learned from this man😊🙏🏽
What you describe is still a ponzi scheme.
Cheques….
Does security mean bonds and stocks?
What a pyramid scheme
Money printer goes BRR
I’m pretty sure the banks can lend much more than 90% in the Netherlands it’s around 96%
Thx
Great.
Are physical assets money? You can sell them.
Sorry this is not well explained. At all
Question- If you withdraw Rs. 1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be
(a) To reduce it by Rs. 1,00,000
(b) To increase it by Rs. 1,00,000
(c) To increase it by more than Rs. 1,00,000
(d) To leave it unchanged
Answer: (d) To leave it unchanged
Can someone explain this to me.
So that means Central Bank buys things with the money that they can print without doing anything. How exactly?
Thank for your sharing .It’s informative