Money supply and demand impacting interest rates발음듣기
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Money supply and demand impacting interest rates
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출처 : 칸아카데미
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I want to go through a bunch of scenarios just so we can understand how different things that happen in the economy might effect interest rates.발음듣기
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That right over here is the price of money, which we know is the interest rate on the vertical axis.발음듣기
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Then the horizontal axis we have the quantity of money that is borrow or lent in a given time period.발음듣기
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We know there is some ... if we just wanted to draw a demand curve our starting demand curve.발음듣기
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The first few dollars out in the economy people are willing to pay a very high interest rate on them.발음듣기
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Their either going to borrow to consume to buy something that they always wanted that they think will make them happy, or more likely their borrowing it to invest it and hopefully getting a return higher than what they are borrowing at.발음듣기
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Now, once again this is the exact same logic we use with the demand and supply curve for any good or service.발음듣기
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Those first few dollars someone has a very low opportunity cost of lending it out, so, their willing to lend it out at a very low interest rate.발음듣기
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Then every incremental dollar after that theirs higher opportunity cost, and people will lend it out at a higher and higher rate.발음듣기
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Let's say that the central bank of our country, in the United States, that would be the Federal Reserve, the central bank prints more money.발음듣기
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That actually is ... in the previous video I talked about the central bank printing money and then dropping it from helicopters, that is not how money is actually distributed.발음듣기
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The way that it enters into circulation in most countries is that the central bank then goes and essentially lends that money.발음듣기
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The way it's done in the US Fed, most part they go out and buy government securities which is essentially lending money to the Federal Government.발음듣기
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What is going to happen over here? Your supply curve is going to shift to the right at any given price, at any given interest rate.발음듣기
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Your new equilibrium price of money, the rent on money, or the interest rate on money is now lower.발음듣기
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That's why when the Federal Reserves say I want to lower interest rates, they do so by printing money.발음듣기
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When you buy a government bond, your essentially lending that money to the Federal Government.발음듣기
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One interesting thing about savings, savings and investment are two opposite sides of the same coin.발음듣기
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For the most part, hopefully, that money when it's lent is used to invest in someway. This is lending.발음듣기
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Then you could even make an argument that if consumers savings is going down consumers are going to borrow less as well.발음듣기
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Let's say that the Federal Government in an effort to ... let's say that for whatever reason, their trying to finance a war or some type of public works project and they don't want to raise taxes.발음듣기
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Here our supply isn't changing. I'm assuming the Central Bank isn't changing it's policies, how much it's printing.발음듣기
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We're going to shift to the right, and our new equilibrium interest rate, remember the rental price of money, is going to go up.발음듣기
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The whole point of this is just to show you that you really can't think about money like any other good or service.발음듣기
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If the supply of money goes up then the price of money, which is interest rates, will go down.발음듣기
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Then we think about all the other combinations where demand goes down, then interest would go down.발음듣기
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You'll see people say, oh, government borrowing, it's crowding out other savings, interest rates go up, and it sounds like something deep is happening.발음듣기
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