Money and Banking Midterm Exam Summary

Summary econ2411 money and banking university of connecticut 2025 1 / 4

Summary econ2411 money and banking university of connecticut 2025 2 / 4

Summary econ2411 money and banking university of connecticut 2025 Money and Banking Midterm Exam Summary Chapter 1- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text The bond and stock markets The structure of the financial system Business cycles, money supply, interest rates and inflation Fiscal and Monetary Policies Chapter 2- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text The structure of the various financial markets The various financial market instruments The function of financial intermediaries Types of financial intermediaries Regulation in the financial system Chapter 3- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text The definition, meaning, functions and forms of money M1 and M2 Chapter 4- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text The concept of Present value and the simple calculation Types of credit market instruments Difference between real interest rates and returns Difference between real and nominal interest rates Chapter 5- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text The determinants of asset demand The Bond market equilibrium and how shifts in demand &supply affect it Chapter 6- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text How risk, liquidity and income tax affects interest rates How term structure affects interest rates…The various theories Chapter 7- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text How is the price of common stock computed and set? One period valuation Theory of Rational Expectations and the implications Chapter 8- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text The 8 basic facts about financial structure and the various reasons for each.Chapter 9- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text The various financial crisis and its stages both domestic and overseas Chapter 10- Review all highlighted definitions in the text Review all Tables, Figures and applications in the text Bank balance sheet part The various principles of bank management and their application 3 / 4

Summary econ2411 money and banking university of connecticut 2025 Chapter 1 - Financial markets

Definitions:

Financial markets- markets in which funds are transferred from people with an excess of available funds to those with a shortage Security- claim on the issuer’s future income Asset- financial claim or piece of property that is subject to ownership Bond- debt security that promises to make payments periodically for a specific period of time Interest rate- cost of borrowing, or the price paid for the rental of funds Common stock- represents a share of ownership in a corporation Financial intermediaries- borrow funds from people who saved and in turn make loans to others Financial crises- major disruption in financial markets characterized by sharp declines in asset prices and the failures of financial and non-financial firms Banks- financial institutions that accept deposits and make loans E-finance- ability to deliver financial services electronically Aggregate price level- average price of goods and services in an economy Inflation- continual increase in price level Inflation rate- rate of change of the price level Monetary policy- management of money and interest rates Central bank- responsible for the conduct of a nations monetary policy Federal Reserve System- United states central bank Fiscal policy- decisions about govt. spending and taxation Budget deficit- excess of govt. expenditures over tax revenues Budget surplus- tax revenues exceed govt. spending GDP- measure of aggregate output The Bond and Stock Markets

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