Video 6

This video is about Money market, loanable funds, and AD-AS. The purpose of macroeconomics is to be able to show the relationships between those 3 markets. If you put all 3 graphs side by side, you can show the difference and relationships between the markets. Deficit spending is when the government borrows money. When someone buys government securities, that is you giving money to the government. In the money market, the demand for money increases, so on the graph, it shifts to the rate. The quantity stays the same. You can demonstrate that on the loanable funds graph by saying it reduces the national money supply level. You then show that demand is shifting to the right, and draw a new line to the right.