Executive Exam Summary

Executive summary Economics of Money Banking and Financial Markets Mishkin 13th Global Edition 9781292409481 Executive Exam Summary Economics of Money Banking and Financial Markets Chapters 1,2,3,4,5,6,9,14,15,19 - most important exam 13 th Global Edition 2021 Mishkin

9781292409481 

Pearson Education Limited

• 75 common test bank questions and answers
• 55 core concepts explained briefly from the book
• Trends and developments field of Financial Markets
• Top 10 new legislature and laws Financial Markets
• 7 lesser known weblinks

This summary was handwritten, no copy paste or AI stuff. As such it reads like that please see first page for writing style. most important things according to professor for the exam 1 / 4

Executive summary Economics of Money Banking and Financial Markets Mishkin 13th Global Edition 9781292409481 2 / 4

Executive summary Economics of Money Banking and Financial Markets Mishkin 13th Global Edition 9781292409481

Chapter 1 : Why study financial money, banking and financial markets?

Financial markets= markets in which funds are transferred from people who have an excess of available funds to people who have a shortage.-Well functioning financial markets are a key factor in producing high economic growth -They have a direct effect on personal wealth, behavior of businesses and consumers. The bond market & interest rates Security= (financial instrument) is a claim on the issuer’s future income or assets Issuer= company or entity that issues the security Assets= any financial claim or piece of property that is subject to ownership Bond= debt security that promises to make periodic payments for a specified period of time.The bond market enables corporations and governments to borrow money to finance their activities also determines interest rates.Interest rate is the cost of borrowing or the price paid for the rental of

funds. It affects:

-Individuals -financial institutions -businesses -overall economy We refer to ‘ the interest rate’ because different interest rates have tendency’s to move simultaneously.Common stock market Common stock= represents a share of ownership in a corporation most followed market in almost each country Fluctuations in stock prices affect the size of people’s wealth, and, as a result, their willingness to spend.Also the higher the price for a share, more funds corporations can raise Why study Financial institutions and banking?Financial intermediates= institutions that borrow funds from people who have saved and in turn make loans to people who need funds.Banks= are financial institutions that accept deposits and make loans.they include commercial banks, saving & loan associations, mutual savings banks, and credit unions. 3 / 4

Executive summary Economics of Money Banking and Financial Markets Mishkin 13th Global Edition 9781292409481 Banks are the largest financial intermediates in our

economy other financial institutions:

-Insurance companies -Finance companies -Pension funds -Mutual Funds -Investment banks

Financial innovation: the development of new financial product and services.

Financial crisis: are major disruptions in financial markets that are characterized by sharp declines in asset prices and failures of firms.Why Study money and monetary policy?Money (money supply)= anything that is generally accepted as payment for goods or services or in the payment of debts.Aggregate supply= total production of goods & services in the country Economy fallsunemployment rate rises economy growsunemployment rate falls Money plays a big role in generating business cycles (= upward and downward movement of aggregate output produced in the economy) Money and monetary policies might affect aggregate output.monetary theory= the quantity of money and monetary policy relates to changes in aggregate economic activity and inflation.Money and inflation The average price of goods and services in an economy is called aggregate price level (price level) Inflation is a continual increase I the price level, it affects individual, businesses, and the government.Increase in money supplyincrease in price levelinflation Average inflation rate= rate of change of price level, as percentage measured per year. Conduct of monetary policy Monetary policy= management of money & interest rates The organization responsible for the conduct of a nation’s monetary policy is the central bank. In the US that is the Federal Reserve System (The Fed)

• / 4