Week 1 notes From Me To You
Week 1 notes From Me To You Econ 3303-001
Popular in money and banking
verified elite notetaker
Popular in Economcs
This 0 page Class Notes was uploaded by IHUOMA ECHENDU on Thursday February 4, 2016. The Class Notes belongs to Econ 3303-001 at University of Texas at Arlington taught by kathy kelly in Winter 2016. Since its upload, it has received 41 views. For similar materials see money and banking in Economcs at University of Texas at Arlington.
Reviews for Week 1 notes From Me To You
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 02/04/16
Notes from Wednesday the 20th of January till Friday the 22nd of January WEEK 1 OF RESUMPTION E NJ OY CH1 Bond Company borrows fund from me and they pay me back with interest it s a promise Interest Rate affect the way we borrow and lend money they differ in the economy 0 Government bonds are default risk free 0 Risk requires compensation 0 Longer term bonds have more interest rate risk 0 Companies with alphabets closer to the beginning have lesser risk 0 High in ation high interest rates they go hand in hand Stock market An equity market When you go buy stock you become a partial owner of the company When the stock prices fall an individual s wealth and willingness to spend money may decrease as well Financial Intermediaries are Important in borrowing money Financial crisis are unanticipated occurrences Financial Innovations these sometimes lead to financial crisis Banks are the source of rapid financial innovations Money is a medium of exchange A business cycle is measured from peak to peak Relationship between money growth and business cycle money growth declines prior to recession Price level In ation here not all prices go up just average prices Maintaining in ation at 2 is very necessary Growing money too rapidly for a long time will lead to an INFLATION De ation continual decrease in price level which is bad for the economy because it makes it difficult to pay back debt it causes unemployment increases inventory and reduces purchases Japan is currently going through depressionde ation Disin ation here the in ation rate is increasing and interest rates are decreasing as well This sometimes can be a good situation The Federal Reserve central bank is in charge of conducting monetary policy in the United States The congress is in charge of conducting fiscal policy in the United States Budget deficit not bringing in enough money to cover expenses Government expenditures exceed tax revenues for a specific time period in this situation We are currently running a budget deficit Foreign exchange market e g from Naira to dollar Appreciation when a country s currency can buy more of another country s currency Depreciation the opposite of appreciation an advantage to exporters typically Strong dollar this benefits people depending on Where they are in the market A strong dollar benefits importers Weak dollar here other countries get to buy more goods from us to their advantage Therefore it benefits exports and hurts importers IF YOU PLAN ON GOING TO EUROPE NET SUMMER YOU WANT A STRONG DOLLAR BECAUSE YOU CAN PURCHASE MORE Exchange rate market It s a uctuating and very volatile market United States is more of a MANAGED FLOAT During a recession output declines resulting in higher unemployment in the economy NOTE these notes contain class discussions based on the notes under the course material section on blackboard along with some answers to questions in those notes
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'