TAILIEUCHUNG - Lecture Principles of economics (Asia Global Edition) - Chapter 20

In this chapter, you will learn to: Describe the role of financial intermediaries, differentiate between bonds and stocks and show why their prices are inversely related to interest rates, explain how the financial system improves the allocation of saving to productive uses, discuss the three functions of money and how the money supply is measured, analyze how the lending behavior of commercial banks affects the money supply, explain how the central bank controls the money supply and its relation to inflation in the long run. | Money, Prices, and the Financial System Chapter 20 McGraw-Hill/Irwin Copyright © 2015 by McGraw-Hill Education (Asia). All rights reserved. Learning Objectives Describe the role of financial intermediaries such as commercial banks in the financial system Differentiate between bonds and stocks and show why their prices are inversely related to interest rates Explain how the financial system improves the allocation of saving to productive uses Discuss the three functions of money and how the money supply is measured Analyze how the lending behavior of commercial banks affects the money supply Explain how a central bank controls the money supply and how control of the money supply is related to inflation in the long run Money in Economics The term "money" in economics has a specific meaning different from every day use To an economist: Your paycheck is income The income you don't spend is saving The increase in the value of your stock is a capital gain When your house appreciates, your wealth increases The Allocation of Saving A successful economy allocates its saving to the most productive investments The interest on deposits is one important reason people put their saving in banks The financial system improves the allocation of saving: Provides information to savers about the possible uses of their funds Help savers share the risks of individual investment projects Risk sharing makes funding possible for projects that are risky but potentially very productive Banking System Financial intermediaries are firms that extend credit to borrowers using funds raised from savers Thousands of commercial banks accept deposits from individuals and businesses and make loans Banks and other intermediaries specialize in evaluating the quality of borrowers Principle of Comparative Advantage Banks have a lower cost of evaluating opportunities than an individual would Banks pool the saving of many individuals to make large loans Banking System Banks gather information about potential

• Kinh tế học
• Principles of economics
• Lecture Principles of economics
• Market imperfections
• The international economy
• Financial system
• Banking system
• Ten principles of economics
• People face tradeoffs
• Opportunity cost
• Marginal changes
• Economics of information
• Consumer choice
• Free rider problem
• Market transactions
• Welfare Economics
• Consumer surplus
• Demand curve
• Efficiency of markets
• Nature of an externality
• Market inefficiency
• Negative externalities
• Principles of microeconomics
• Lecture Principles of microeconomics
• Scarce resources
• Scarcity implies choice
• Choice implies cost
• Principles of agricultural economics
• Agricultural economics
• Economics of agricultural production
• Theory of consumer behaviour
• Economics of market demand
• Dynamics in demand analysis
• Analysis of agricultural markets
• Agricultural markets
• Economics of trade
• Costs of taxation
• Deadweight loss
• Laffer curve
• Supply side economics
• Market forces
• Supply and demand
• Market economies
• Competitive Markets
• Thinking like an economist
• Economic models
• Circular flow diagram
• Production possibilities frontier
• The gains from trade
• Production possibilities
• Comparative advantage
• Absolute advantage
• Costs of production
• Total revenue
• Total cost
• Opportunity costs
• Price elasticity of demand
• Price elasticity
• Midpoint method
• Demand curves
• Factors of production
• Demand for labor
• Production function
• Marginal product of labor
• Controls on prices
• Price ceiling
• Price floor
• Market outcomes
• Theory of consumer choice
• Budget constraint
• Indifference curve
• Marginal rate of substitution
• Measuring nation’s income
• Economy’s income
• Gross domestic product
• Components of GDP
• International trade
• Determinants of trade
• Equilibrium without trade
• Production and growth
• Economic growth
• Monetary system
• Functions of money
• Federal reserve
• Central bank
• Open economy macroeconomics
• Economy macroeconomics
• Closed economy
• Open economy
• Public goods
• Common resource
• Types of goods
• Cost benefit analysis
• Aggregate demand
• Aggregate supply
• Short run economic fluctuations
• Economic fluctuations
• Tax system
• Federal Government
• Marginal tax rate
• Budget surplus
• Macroeconomic policy
• Debate over macroeconomic policy
• Stabilize the economy
• Monetary policy