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Money and Finance: Crash Course Economics #11

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So, we've been putting off a kind of basic question here. What is money? What is currency? How are the two different. Well, not to give away too much, but money has a few basic functions. It acts as a store of value, a medium of exchange, and as a unit of account. Money isn't just bills and coins. It can be anything that meets these three criteria. In US prisons, apparently, pouches of Mackerel are currency. Yes, mackerel the fish. Paper and coins work as money because they're backed by the government, which is an advantage over mackerel. So, once you've got money, you need finance. We'll talk about borrowing, lending, interest, and stocks and bonds. Also, this episode features a giant zucchini, which Adriene grew in her garden. So that's cool.


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Author

*Main outtakes of this lesson*
1) Money serve three main purposes:
- Medium of exchange. It is generally accepted for payment for goods and services.
- Store of value. Money can be stored.
- Unit of account. Money is standartized metric that helps us measure value of things.
2) Financial system.
a. Lenders
b. Borrowers
c. Governments
d. _Capital_ - the machinery, tools and factories owned by a business and used in production.
e. _Financial system_ is a network of institutions, markets and contracts that brings lenders and borrowers together.
f. _Debt_ - if you get a loan from the bank, you are obligated to pay back the amount you borrowed plus the amount of interest.
g. _Equity_ - the difference between the value of the assets/ interest and the cost of liabilities of something owned.
h. _Financial instrument_ - a tradeable asset of any kind.
i. _Financial institution_ - an establishment that conducts financial transactions such as investments, loans and deposits.
j. Financial markets with instruments like stocks and bonds, allow borrowers to crowdsource the money they need to borrow. They raise their capital from lots of investors, and spread the risk around.

Author — Сергей Галиуллин

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10 BITCOIN FOR A ZUCCHINI? That zucchini better be embedded with gold or something, damn.

Author — killerfrenchy

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Some notes if anyone needs em!

-Barter system is the alternative to money, but is highly inefficient
-Money serves as a medium to exchange, store of value, and a unit of account
-In the past we had the gold standard which connected each dollar to a value of gold
-Stock market is part of the Financial system which is composed of Lenders (corporations and households) and borrowers (households, businesses, governments)
-Financial system = a network of institutions, markets, and contracts that brings lenders and borrowers together
-3 ways this happens: banks, bonds, stock market
-Banks deal with debt, stocks deal with equity (the difference between the value of assets/ interests and the cost of the liabilities of something owned)
-Financial instrument = a tradeable asset of any kind
-Banks are Financial Institutions = an establishment that conducts financial transactions such as investments, loans, and deposits

Author — Stas Pakhomov

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I mean, she should have expected the zucchini jokes...

Author — Andre Vieira

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10 bit coins ($2, 500) for zucchini? what is she smoking?

Author — Vaibhav Gupta

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Does Patreon accept Zucchinis as payment?

Author — Ryan Tsui

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Did anyone else notice the bag of chips in the black and white picture?

Author — Mickey Odunikan

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Crash Course= A + I wish my college Professors went to Crash Course College =)

Author — Marvin Theodore Sr.

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NONE OF THIS WAS TAUGHT IN MY FINANCE 101 CLASS. .... PROFESDOR WHY WON'T YOU GIVE US A STUDY GUIDE FOR THE FINAL??? IM GOING TO DIE TOMORROW

Author — Sierra Rissell

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Dear Crash Course Economics team, I want to thank you for everything. A few weeks ago, I was panicking because my academic decathlon competition was coming up and I knew nothing of economics. What did I do? I watched all your videos and as a result I received a medal in economics!!! Thank you for everything. Continue the good work!!!

Author — Jacqueline Arteaga

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A minor correction, bitcoin is *not* anonymous; it is pseudonymous. All transactions that have ever occurred since Bitcoin's inception is permanently recorded on the public world-wide ledger. There're no names and identities associated with each transaction but it doesn't mean someone can't figure out who made those transactions with some research. In fact, there are already tools to help assist with this.

Given that fact, using bitcoins for illicit transactions is ill advised; fiat cash like dollars and euros is better suited for that purpose.

Author — greatwolf

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This is the best video in the series so far. Straightforward, easy to follow, and no political stalking horses.

Author — J. D. Montgomery

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2:09 there is a bag of ruffles hidden in the photo

Author — Gu Productions /\/

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Ruffles must have been around forever...

Author — xccmx

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you want 10 bitcoins for that? (= 2200 euro)

Author — samramdebest

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where did you get this african zucchini.?

Author — birender singh

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6:38 "the bank takes part of the money to cover their costs and passes the rest to the depositer..." hahaha I wish the reality was like that but I think the right way to explain it is: "the bank takes a huge amount of the money to cover its costs and make massive profits and give the depositer a pathetic interest rate"

Author — Emilio Zorrilla

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Listen you crustaceous cheapskate! Squidward's been living at my house driving me crazy! And you're not gonna hire him back all because of a stupid dime?!

Author — Jonathan Dee

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Lmaoooo 10 bitcoin is like 70000$ ill gladly buy the zucchini

Author — owen danby

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I didn’t get how money gets its value ? and why some currencies are more valuable than others ?

Author — mohamed talha