Basic economics_part2

Dear students!

Watch the video from 7:11 to 14:40

https://www.youtube.com/watch?v=PHe0bXAIuk0

Answer the questions and upload your answers:

Basic economics_questions2.docx

1. What’s the difference between economies without and with credit?
2. „ you borrow from your future self” What does it mean? Why is the outcome predictable?

3. What’s the difference between money and credit?
4. What do 50 trillion and 3 trillion dollars refer to in the example?
5. When is credit really bad?
6. When is credit relatively „good” according to this explanation?
7. „Your spending is another person’s income”. What does it create?
8. Why do prices grow in the expansion phase?
9. What is inflation?
10. How does the Central bank react to the inflation?
11. What’s the consequence of a higher interest rate?
12. What does slower spending cause?
13. What is deflation?
14. What is recession?
15. How does the Central Bank react to deflation?
16. What happens when debts rise faster than incomes?