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What's all the Yellen About? Monetary Policy and the Federal Reserve: Crash Course Economics #10

  • 🎬 Video
  • ℹ️ Description
This week on Crash Course Economics, we're talking about monetary policy. The reality of the world is that the United States (and most of the world's economies) are, to varying degrees, Keynesian. When things go wrong, economically, the central bank of the country intervenes to try aand get things back on track. In the United States, the Federal Reserve is the organization that steps in to use monetary policy to steer the economy. When the Fed, as it's called, does step in, there are a few different tacks it can take. The Fed can change interest rates, or it can change the money supply. This is pretty interesting stuff, and it's what we're getting into today.


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💬 Comments on the video
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It would be interesting to see a revamp of this series in the wake of covid-19

Author — Kollin Wasserlein

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*Main outtakes of this lesson*
1) The Federal Reserve is the central bank of US. Europe has the European Central Bank.
a. Most Central Banks have two jobs:
- they _regulate_ and _oversee_ the nation's commercial banks by making sure that banks have enough money in reserve to avoid bank runs.
- they conduct _monetary policy_ which is increasing or decreasing the money supply to speed up or slow down the overall economy.
2) _Interest rate_ - the price of borrowing money.
a. When interest rates are low, borrowers will find it easier to pay back loans so they will borrow more and spend more. When interest rates are high, borrowers borrow less and spend less.
b. _Expansionary monetary policy_ - when central bank wants to speed up the economy, it will increase the money supply, which will decrease interest rates and lead to more borrowing and spending.
c. _Contractionary monetary policy_ - when central bank wants to slow down the economy, they decrease the money supply. Less money available will increase interest rates and decrease borrowing and spending.
3) _Liquid assets_ - an asset that can be converted into cash quickly and with minimal impact to the price received.
4) _Open market operations_ - this is when the federal reserve buys or sells short term government bonds.
5) _Quantitative easing (Q.E.)_ - when central banks buy longer term assets from banks.
6) *Monetary policy* - changing money supply to speed up or slow down economy.

Author — Сергей Галиуллин

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Why do so many people complain about them talking too fast? If it bothers you that much, put the video on 0.75 speed. No one's perfect.

Author — Jacqueline

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You can tell you're a nerd when you binge watch crash course.

Author — OakleafWarrior

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Your videos are so knowledgable that I m glued to my laptop watching them 1 episode after another....N my roommates just asked what TV series is so interesting that I said no to a cricket game....Gratitude from India.

Author — feludaify

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I... Don't know who it Janet Yellen is, even after watching the episode twice. ._.

Author — Dojo Breaker

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The illuminati runs the Fed?! It all makes sense now!

Author — Ryan

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4:16 Fun detail: "noli oblivisci mirabilis esse" is Latin for "don't forget to be awesome"

Author — Several drunk giraffes

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Dear CrashCourse,
You're saving me from my Macroeconomics final tomorrow, .
Thank you dearly.

Author — Nathan []

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it doesn't mention that it's a PRIVATE bank...

Author — Gregory Mize

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Missed two important things
1: Money is dept (for the most part)
2: Private banks create most of the money

Author — Dimonay

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"Who knows how to spell Quantitative?" Is that really a challenging word?

Author — Bfranx

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Great course, thanks a lot for making this available! Just one question: at 5"12 you say "These treasury bills are issued by the Government" but at 5"26 it says, "If the Fed issues more bonds.." - so who is actually issuing these bonds, Gov or Fed ?

Author — erik schaepers

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The guy in this video talks way too fast!! - I had to rewind it after every clip, just to grasp all of what he's saying.

Author — Sergio Loyola

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You make it sound like the Federal Reserve is a government body. It's not.

Author — Stephen Blackwell

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These videos just cover the basics. All the 19 year old armchair economists that think they know everything need to chill out

Author — David Lopez

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I'm a business major going into my econ final, and I just wanted to say thank you for clearing this up for me. I've watched most of the crash course economics and they have helped me so much!

Author — Robert D

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This is addictive. My eyes are heavy, its 1 am but I don't wanna sleep!!!! This is so interesting!

Author — Prathit

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Mr. Clifford's "just kiddings" are the best.

Author — Clayburn Griffin

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5:19 quantitative easing? central bank buying govt bonds and securities

Author — Tropical Magic