Lisa’s “Money” took over the airwaves thanks to TikTok. The song addresses several economic concepts. First, currency is considered a medium of exchange, and cash is perfectly liquid. Understanding the important role that currency plays is critical to market transactions. Second, the sum of currency and checkable deposits are equivalent to the M1, Money Supply. Throughout the song, Lisa assures us that cash and her bank account support her lifestyle. Lisa provides several lines about her purchasing and spending behavior, supporting the definition of the velocity of money. Economists measure the velocity of money to examine how currency travels throughout the economy, measuring the quantity of exchanges.
Thanks to Brad Scott for the clip recommendation and summary!
In this animated short from the Walt Disney Company, Uncle Scrooge discusses the history or money and the importance of money in the overall economy. There are A LOT of great teaching opportunities in this clip and would make a great summary of a money supply lesson or a required video to be watched before the lesson.
Opening to 7:15 History of Money Huey, Dewie, and Louie visit Scrooge McDuck and request that he help them save the money they had earned. Scrooge goes through the history of money and discusses the role of salt as the original salary that Roman soldiers received. He then goes on to describe money from other societies and why money was important following original barter economies. The characters even discuss the role of money as a medium of exchange!
7:15 to 9:59 Inflation After learning of the importance of money in the economy, the brothers question why central banks don’t just print more money if everyone wants it. Uncle Scrooge discusses the role of fiat money and why it’s important for the money to be backed by something or someone who can promise to pay the notes that are printed.
10:00 to 13:20 Financial Planning and Taxes Uncle Scrooge teaches the brothers about the importance of budgeting. People need to make sure that they allocate a portion of their income toward rent, food, and other necessities. He also teaches them about the role of taxes and how important it is for governments to have a budget and make sure that they collect taxes to pay debt.
13:20 to End Velocity of Money & Investment The boys are curious why Scrooge keeps so much money in his vault if he tells them that it’s important to put money “to work.” He teaches them that the money in his vault is just his petty cash and then goes on to discuss the importance of money circulating through the economy. The ending portion discusses the role of corporations issuing stocks and shareholders collecting dividends. At the end, he signs the boys up to manage their funds, but charges them a fee. The boys aren’t happy, but he laments that “nothing is ever free.”
Jakes owes everyone on the squad a lot of money and he starts by paying back Terry. Initially, Jake tries to buy something from a vending machine by giving it a $2.50 coupon because he believes that’s worth what’s printed on the money. When he tries to borrow money from Terry, the Sergeant decides to cut him off because he’s borrowed too much money. Based on the interactions of the squad and Jake, he has a fairly high leverage ratio. When Jake decides to start pay back Terry, he starts by emptying his bank account since that’s the most liquid of his assets.