In this lesson you will learn about the financial system and the money supply. Make sure to watch the videos below to get it all.
In this lesson you will learn how bank balance sheets work and how they create money (yes it is legal).
In this lesson you will learn another very important graph in Macro - the loanable funds market. You also need to know the money market which is not shown very well in the lesson. However, there is a video about it below (it's the first one).
In this lesson you will learn the 'Equation of Exchange'. There isn't really any videos for this, but it is pretty simple. The equation is MV=PY where M is the money supply, V is the 'velocity of money' or how many times money changes hands, P is the price level and Y is real gdp. The right side of the equation basically represents nominal GDP. So the equation basically just says that the money supply multiplied by the velocity of money equals nominal GDP.