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Money, Banking, & Financial Markets
MONEY & BANKNG
CLASS CODE: ECON 453 CREDITS:  3
DIVISION: BUSINESS & COMMUNICATION
DEPARTMENT: ECONOMICS
GENERAL EDUCATION: This course does not fulfill a General Education requirement.

DESCRIPTION: Money, Banking, and Financial Markets examines money and banking issues from an economics perspective. This course is composed of three general sections. First, it considers how individual consumers and investors make decisions based on what they expect will give them the highest level of satisfaction (in the financial world this is known as maximizing returns). Second, the course examines the nature and behavior of financial institutions (banks, credit unions, etc.) to see how they try to maximize profits while considering potential costs as well as government regulations. Finally, the course analyzes various theories of monetary economic policy and their implications for financial markets, and the economy.
TAUGHT: Winter 2004, Fall 2004, Summer 2005, Winter 2006
CONTENT AND TOPICS:

  • Why Study Money, Banking, and Financial Markets?

  • Review: Aggregate Output, Income, the Price Level, and the Inflation Rate

  • Overview of the Financial System

  • What is Money?

  • Understanding Interest Rates

  • Asset Demand and the Behavior of Interest Rates

  • An Economic Analysis of Financial Structure

  • Banking and the Management of Financial Institutions

  • Banking Industry: Structure and Competition

  • Structure of Central Banks and the Federal Reserve System

  • Multiple Deposit Creation and the Money Supply Process

  • Tools of Monetary Policy

  • Conduct of Monetary Policy: Goals and Targets

  • The Keynesian Framework and the ISLM Model

  • Monetary and Fiscal Policy in the ISLM Model

  • Aggregate Demand and Supply Analysis

  • The Transmission Mechanisms of Monetary Policy: The Evidence

GOALS AND OBJECTIVES:

  1. Provide a basic understanding of Money and Banking topics.

  2. Develop the ability to think analytically and logically by examining topics, issues, and relationships pertaining to Money and Banking.

  3. Obtain new tools for considering other policy issues (even those outside the realm of Money and Banking) and be able to form conclusions.

  4. Experience in applying Money and Banking theories to “real-world” situations through exercises and writing assignments.

REQUIREMENTS:

  • Prepare for class by doing the assigned reading and then attend class sessions being awake and alert, ready to contribute to class discussions.

  • Take at least 9 of the 10 quizzes given in class.

  • Take four exams.

  • Complete the three writing assignments that apply the Money & Banking topics of the class to articles found in financial journals and publications.

  • Group project on operation of the FOMC.

PREREQUISITES: Economics 111, 112, Math 221
OTHER:
EFFECTIVE DATE: August 2001