Available online
Description
In this programme Professor Brooman explains the quantity theory of money. To do this he introduces the concept of the velocity of circulation of money. Given this he derives the demand for money i...n the economy to cover the transactions that are taking place. He explains how you might try to estimate the velocity of circulation. He then considers the supply of money and how an equilibrium between demand and supply might be by considering what will happen if attained. He finishes the equilibrium is disturbed by an increase in the supply of money.
In this programme Professor Brooman explains the quantity theory of money. To do this he introduces the concept of the velocity of circulation of money. Given this he derives the demand for money i...n the economy to cover the transactions that are taking place. He explains how you might try to estimate the velocity of circulation. He then considers the supply of money and how an equilibrium between demand and supply might be by considering what will happen if attained. He finishes the equilibrium is disturbed by an increase in the supply of money.
| Module code and title: | D100, Understanding society: a foundation course |
|---|---|
| Item code: | D100; 15 |
| First transmission date: | 14-03-1971 |
| Published: | 1971 |
| Rights Statement: | |
| Restrictions on use: | |
| Duration: | 00:25:00 |
| + Show more... | |
| Producer: | Peter Ramsden |
| Contributor: | F. S Brooman |
| Publisher: | BBC Open University |
| Keyword(s): | Economics; Economics |
| Footage description: | Brooman cites as an example of the circulation of money, the way in which a worker spends his weekly pay packet and how the same pound notes can end up in his pay again the following week. This raises the question of the total amount of money needed to operate the economy. Brooman determines the total monetary value of all goods and services being exchanged in an economy, P x Q and divides it by the velocity of circulation PQ/V This gives the quantity of money needed in an economy. Brooman works out an example with hypothetical figures. How is V (velocity of circulation) determined? Brooman uses as an example a wage earner paid on a weekly basis and compares this with one on a monthly basis. The spending patterns of each is plotted on a graph. Brooman looks at the pattern of money circulation of individual firms and compares these patterns with those of individual receipt and spending patterns. Brooman sums up the factors which determine the velocity of circulation Brooman introduces a re-arrangement of the "quantity equation" M= PQ/V and discusses the effects of disturbance of the equillibrium by variation in any of its parts. Credits. |
| Master spool number: | 6LT70175 |
| Production number: | 00520_1212 |
| Videofinder number: | n/a |
| Available to public: | no |
