1) What is the money?
Money is an economic unit which is accepted as payment for goods and services
and debt repayment in a given country.
2) Explain the functions of money on the example of your or your parents daily
activities?
Money primarily functions as a medium of exchange. That is, for example, when
we go to a store, we put the things we need into the basket, and exchange money
for them at the checkout. Also, you need to pay for any service (beauty salon,
hospital, transport), even for a parking space in many places it is paid. There are
other functions: a store of value, which shows that prices, expressed in money,
allow us to compare: how much some goods are more expensive than others.
Because the value of a commodity expressed in money is called a price.
3) Explain speculative motive in Keynes theory on demand for money:
The speculative motive is important because it creates instability in the demand for
money. As a result of this instability, the close connection between the money
supply and the price level is broken and, accordingly, the quantitative theory of
money ceases to “work”. All of the above does not exhaust the significance of
interest as a monetary phenomenon. According to J.M. Keynes, the interest rate
may in the long term become a factor that slows down economic development.
4) Explain how banks make their profits?
Banks generally make money in three ways: interest on loans, interchange, and
fees.
In the video the bank receives money from the Federal Reserve System. To be
more precise, the FRS lends money to the bank, which the banks will then have to
pay back with interest.
5) What does the phrase “I killed the bank” mean in this video?
Jackson had killed the central bank, the most insidious weapon of the “money
changers” – fractional reserve banking – remained in use by the numerous state–
chartered banks. This fueled economic instability in the years before the Civil
War.
6) What does the term “run on the bank” mean and have we ever had such
experience in our country?
