About This Chapter
Money & the Market - Chapter Summary
This self-paced chapter offers an in-depth look at money and the money market through entertaining video lessons. Developed by top instructors, these videos make your review of the functions of money, the multiplier effect, types of financial assets and other related concepts fun and effective. Review them whenever and wherever your schedule permits. In no time, you will be ready to:
- List and describe basic types of financial assets
- Calculate the time value of money
- Define money, and measure the money supply
- Identify four basic functions of money, and explain how money is made
- Share the definitions of required reserves and excess reserves
- Determine changes to the reserve ratio using the money multiplier formula
- Discuss money demand, interest rates and the money market
- Provide the definition of and understand the formula for the coupon rate
Lessons in this chapter are available in two formats: video and transcript. Watch the videos if you enjoy learning with help from engaging visual effects. Scroll below the videos to access transcripts if you'd like to read the lessons and print them to add to your study materials. Use the short quizzes and practice exam to assess your comprehension of money and the market concepts. Any questions you have about lesson topics can be submitted to our experts.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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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