mkt 501

Week Five Student Guide This week’s topics include credit markets’ effect on the economy, as well as global economic conditions regarding trade and specialization business decisions. Concepts discussed include credit markets and the role of the Federal Reserve in creating money and controlling the money supply, as well as how economies interact with one another. The readings for the week address the role of the Federal Reserve and foreign exchange. These concepts emphasize the role of central banks in global financial crises and the tools they must utilize.

Credit Markets and Globalization

OBJECTIVE: Project the effect of credit markets on the economy.

Resource: Ch. 18 of Money, Banking, and Financial Markets

Content

Ch. 18: Financial Crises of Money, Banking, and Financial Markets

The Mechanics of Financial Crises
Policy Responses to Financial Crises
Financial Crises in Emerging Economies

Resource: Ch. 27, 32, & 33 of Economics

Content

Ch. 27: Basic Macroeconomic Relationships of Economics

The Income-Consumption and Income-Saving Relationships
The Interest-Rate–Investment Relationship
The Multiplier Effect

Ch. 32: Money Creation of Economics

The Fractional Reserve System
A Single Commercial Bank
Money-Creating Transactions of a Commercial Bank
The Banking System: Multiple-Deposit Expansion

Ch. 33: Interest Rates and Monetary Policy of Economics

Interest Rates
The Consolidated Balance Sheet of the Federal Reserve Banks
Tools of Monetary Policy
Targeting the Federal Funds Rate
Monetary Policy, Real GDP, and the Price Level
Monetary Policy: Evaluation and Issues
The “Big Picture”

OBJECTIVE: Project the effect of global economic conditions regarding trade and specialization business decisions.

Resource: Ch. 31 of Economics

Content

Ch. 31: Money and Banking of Economics

The Functions of Money
The Components of the Money Supply
What “Backs” the Money Supply?
The