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Ch 11: Money, Banking and Financial Markets

About This Chapter

Watch video lessons on money, banking, and financial markets to deepen your understanding of finance and the economy. Take the quizzes that follow each lesson to test your knowledge of these crucial macroeconomics topics.

Money, Banking and Financial Markets

You probably have some opinions about banks. Maybe you like banks because you associate them with getting lollipops when you'd run errands with your parents as a kid. Or, maybe your opinions are more nuanced and based on more complex information. No matter what you think, banks are a big part of our economic reality. And as you'll learn in these videos, money, banking, and financial markets are pretty complex.

These videos cover important topics that you may know a little something about already, like stocks and bonds, bank lending, interest rates, and loans. You'll start off by learning about the different types of financial assets, which include money, stocks, and bonds. Then you'll move on to learn about the time value of money, which includes present and future values.

Are you aware that there's such a thing as 'the money supply?' No, we're not talking about those lonely dollar bills in your wallet. The money supply is a real, serious economic factor, and you'll learn about it, including the different ways it's measured, in these lessons. You'll also learn about monetary reserves and how bank lending works.

Finally, these lessons explore supply and demand for things like money and loanable funds. You'll hear an explanation for how interest rates can impact loanable funds and the market for loans. This set of lessons on money, banking, and financial markets can not only help you as an economics student, but may also help your personal financial understanding as well.

11 Lessons in Chapter 11: Money, Banking and Financial Markets
Types of Financial Assets: Money, Stocks & Bonds

1. Types of Financial Assets: Money, Stocks & Bonds

For an economy to operate effectively, consumers and businesses need a common medium of exchange and mechanisms to encourage some people to save, others to borrow and others to invest. In any modern economy, these needs are met with money, stocks and bonds.

Present and Future Value: Calculating the Time Value of Money

2. Present and Future Value: Calculating the Time Value of Money

A central concept in business and finance is the time value of money. We will use easy to follow examples and calculate the present and future value of both sums of money and annuities.

Measuring the Money Supply: Explanation and Examples

3. Measuring the Money Supply: Explanation and Examples

Discover how the Federal Reserve defines the money supply by exploring the components of the money stock. In this lesson, we also look at the money supply in terms of function and liquidity.

What is Money? - Definition and Types

4. What is Money? - Definition and Types

In this lesson, you'll learn what money is and its four basic functions. You'll also take a look at how it benefits society and explore the different types of money.

The Four Basic Functions of Money

5. The Four Basic Functions of Money

This lesson uses real-world examples to describe the four basic functions that money serves in an economy. These basic functions help to create the foundation of the money system.

Fractional Reserve System: Required and Excess Reserves

6. Fractional Reserve System: Required and Excess Reserves

This lesson provides an overview of basic banking concepts, illustrating how deposits turn into required reserves and excess reserves. It also covers how a bank accounts for these items on its balance sheet.

How Money Is Made: Understanding Bank Lending in the Economy

7. How Money Is Made: Understanding Bank Lending in the Economy

In this lesson, you'll learn how a single deposit in a local bank increases the money supply and filters through the economy with the help of the fractional reserve banking system.

Money and Multiplier Effect: Formula and Reserve Ratio

8. Money and Multiplier Effect: Formula and Reserve Ratio

In this lesson, explore the concept of the multiplier effect and the money multiplier. Then, learn the formula for calculating changes in the money supply.

Money Demand and Interest Rates: Economics of Demand

9. Money Demand and Interest Rates: Economics of Demand

Learn about the differences between money, wealth and income and explore the factors that determine the demand for money in an economy. Take a look at the demand curve for money as well.

The Money Market: Money Supply and Money Demand Curves

10. The Money Market: Money Supply and Money Demand Curves

This lesson explores an economic model describing the supply and demand for money in a nation, referred to as the money market. It also describes the central bank's role in controlling the money supply, which impacts interest rates and the greater economy.

Coupon Rate: Definition, Formula & Calculation

11. Coupon Rate: Definition, Formula & Calculation

This lesson will define coupon rate, a term used in fixed-income investing. The formula for coupon rate will be given, along with a calculation using the coupon rate.

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