2.3. The Circulation of Money

Update: 2014-12-01

Description

Farm production produces three rents, one of which sustains the farm workers, while the other two can be sold at wholesale to entrepreneurs who in turn provide property owners and farmers with goods and merchandise. This is the circular flow model of the economy. Money facilitates the flow and timing of rent payments (i.e., “velocity”) and the rate of the monetary flow determines the ratio between the quantity of money and the value of annual production. This model is then used to explain the implications of international trade.

From Part 2: Money and Interest. Narrated by Millian Quinteros.

Comments

In Channel

3.8. The Refinements of Credit of General Banks

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3.7. Further Explanations and Enquiries as to the Utility of a National Bank

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3.6. Banks and their Credit

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3.5. The Augmentation and Diminution of the Denomination of Money

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3.4. The Variations in the Proportion of Values with Regard to the Metals Used as Money

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3.3. Further Explanations on the Nature of Exchanges

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3.2. On Bills of Exchanges and their Nature

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3.1. Foreign Trade

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2.10. The Causes of Increases and Decreases of the Interest Rate on Money in a State

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2.9. Interest on Money and its Causes

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2.8. Further Reflections on the Increase and Decrease of Money in a State

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2.7. Continuation of the same subject

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2.6. The Increase and Decrease of the Quantity of Money in a State

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2.5. The inequality of the circulation of hard money in a State

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2.4. Further Reflection on the Rapidity or Slowness of the Circulation of Money in Exchange

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2.3. The Circulation of Money

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2.2. Market Prices

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2.1. Barter

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1.17. Metals and Money, and especially of Gold and Silver

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1.16. The more Labor there is in a State, the more the State is Judged Naturally Rich

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2.3. The Circulation of Money

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2.3. The Circulation of Money

Richard Cantillon

2.3. The Circulation of Money