summary the economics of money banking and financial marketins 13th edition global edition mishkin 9781292409481
,summary the economics of money banking and financial marketins 13th edition global edition mishkin 9781292409481
, summary the economics of money banking and financial marketins 13th edition global edition mishkin 9781292409481
Banking chapter 1 - Why study money, banking, and financial markets?
Why study 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 –
bond/stock markets crucial to promote greater economic efficiency by channeling funds –
well-functioning financial markets are key in producing high economic growth.
The bond market and interest rates – security: claim on issuer’s future income or assets; any
financial claim or piece of property that is subject to ownership. Bond: debt security that
promises to make payments periodically for a specified period of time – bond market enables
corporation/governments to borrow to finance activities and it determines interest rates.
Interest rate: cost of borrowing or the price paid for the rental of funds – e.g. mortgage
interest rates, car loan rates – personally; high rates could deter you from buying a
house//encourage to save – generally; affect not only consumers but also businesses – interest
can differ and fluctuate heavily.
The stock market – common stock: represents a share of ownership in a corporation – is a
security that’s a claim on earnings/assets of a corporation – issuing stocks is a way to raise
funds to finance activities – stock market globally most followed financial market – fluctuates
a lot. Important factor in business investment decisions since price of share affects amount of
funds that can be raised.
Why study financial institutions and banking? – banks and other financial institutions are
what make financial markets work.
Structure of the financial system – private sector financial institutions, insurance companies,
mutual funds, investment banks – lend to a company through financial intermediaries:
institutions that borrow funds from people who have saved and in turn make loans to others.
Financial crisis – financial crisis: major disruptions in financial markets that are
characterized by sharp declines in asset prices and the failures of many (non-)financial firms.
Banks and other financial institutions – bank: financial institution that accept deposits and
make loans – commercial banks, savings associations, mutual savings banks.
Financial innovation – financial innovation: development of new financial products and
services – make the financial system more efficient – e-finance: to deliver financial services
electronically.
Why study money and monetary policy? - money/money supply: anything that is generally
accepted in payment for goods or services or in the repayment of debts. Money and business
cycles – aggregate output: total production of goods and services – unemployment rate:
percentage of the available labor force unemployed. Business cycles: upward/downward
movement of aggregate output produced in the economy – recessions: periods of declining
aggregate output – monetary theory: theory that relates quantity of money and monetary
policy to changes in aggregate economic activity and inflation.
,summary the economics of money banking and financial marketins 13th edition global edition mishkin 9781292409481
, summary the economics of money banking and financial marketins 13th edition global edition mishkin 9781292409481
Banking chapter 1 - Why study money, banking, and financial markets?
Why study 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 –
bond/stock markets crucial to promote greater economic efficiency by channeling funds –
well-functioning financial markets are key in producing high economic growth.
The bond market and interest rates – security: claim on issuer’s future income or assets; any
financial claim or piece of property that is subject to ownership. Bond: debt security that
promises to make payments periodically for a specified period of time – bond market enables
corporation/governments to borrow to finance activities and it determines interest rates.
Interest rate: cost of borrowing or the price paid for the rental of funds – e.g. mortgage
interest rates, car loan rates – personally; high rates could deter you from buying a
house//encourage to save – generally; affect not only consumers but also businesses – interest
can differ and fluctuate heavily.
The stock market – common stock: represents a share of ownership in a corporation – is a
security that’s a claim on earnings/assets of a corporation – issuing stocks is a way to raise
funds to finance activities – stock market globally most followed financial market – fluctuates
a lot. Important factor in business investment decisions since price of share affects amount of
funds that can be raised.
Why study financial institutions and banking? – banks and other financial institutions are
what make financial markets work.
Structure of the financial system – private sector financial institutions, insurance companies,
mutual funds, investment banks – lend to a company through financial intermediaries:
institutions that borrow funds from people who have saved and in turn make loans to others.
Financial crisis – financial crisis: major disruptions in financial markets that are
characterized by sharp declines in asset prices and the failures of many (non-)financial firms.
Banks and other financial institutions – bank: financial institution that accept deposits and
make loans – commercial banks, savings associations, mutual savings banks.
Financial innovation – financial innovation: development of new financial products and
services – make the financial system more efficient – e-finance: to deliver financial services
electronically.
Why study money and monetary policy? - money/money supply: anything that is generally
accepted in payment for goods or services or in the repayment of debts. Money and business
cycles – aggregate output: total production of goods and services – unemployment rate:
percentage of the available labor force unemployed. Business cycles: upward/downward
movement of aggregate output produced in the economy – recessions: periods of declining
aggregate output – monetary theory: theory that relates quantity of money and monetary
policy to changes in aggregate economic activity and inflation.
