How interest rates affect interest rates, financial flows, and exchange rates

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How interest rates affect interest rates, financial flows, and exchange rates

[omarshamma]

Love u khan, at every time, am looking for something to understand in economy; I find it in your videos.

[nahaktam]

Thanks so much for making this video - it was well worth the time to watch! I feel like I'll now be able to better understand the meaning of financial announcements by the government. Will be sharing your content with others around me! :)

[yash]

Best explanation i have ever heard, i have to now watch your videos...

[troypresley]

Good video, but there are 2 problems: 1) the example of the Fed increasing reserves ignores that reserve funds cannot be loaned out, so Loanable Funds don’t change (the interest rate is decreased because bond prices increase when the Fed increases bond purchases, lowering the yield, but banks’ capacity to loan is unaffected), and 2) in the description of capital flows from US to Japanese bonds, any bond being sold would need to be purchased by another buyer (and visa versa) so the aggregate number of bonds outstanding doesn’t change in either country, only the yield/price of the bonds.

[davideke]

Glad I could find this considering the recent FED decisions😂

[ChiragSonne]

Fun Fact: USA and Japan have share a relationship with each other having pop culture like Power Rangers (American franchise) and Super Sentai (Japanese counterpart franchise), also they share values like baseball and softball are popular in Japan and America! And also they share different beliefs and cultures! @Khan Academy But with economics they always been with stock market

[doroteade]

The meaning of excellence lies in you.

[Josiahsin]

It all depends on a very closed set of assumptions without taking into account the nature of the actual goods and investments being traded...

[zarazafar]

then why does the currency with the higher interest rates trade at a discount

[yassinewaterlaw]

Is it common to call it ( money coming from foreign investors to benefit from local high interest rates ) hot money bcz prime minister of egypt and most economists in egypt call that type of capital inflow hot money