Unit Four: The Financial Sector
91. Discussion on Savings and Investments, and how to calculate National Savings. Notes can be found here: Capital (Saving and Investment); Saving and Investment in the National Economy; and Saving and Investment in the Global Economy. Assignments: Read Peggy Pride article ("Nominal or Real. . . .") on the loanable funds market, summarizing with a 50-word sentence, due 3/22; complete Activity 22 (Investment Demand) and Activity 4-5 (Loanable Funds Market), which are due April 11th. [3/19]
2. Discussion on the Loanable Funds Market and interest rates (real and nominal), the crowding-out effect, and the Barro-Ricardo effect. Notes can be found here: Interest Rates and Inflation [Note: formula for interest rates is real int. rate = nominal int. rate - inflation rate.]; Assignments: Read Module 23; and complete Activity 5-7 (Crowding Out), due April 11th. [3/20]
4. Discussion on Financial Systems. Assignments: Read Module 24; in notebook, answer Checking for Understanding #3 (p.237) and #1 (p.243), M/C #1-5 (p.237), #2-5 (p.243), and FRQ #2 (p.237); complete Activities 4-1 (Money and Financial Assets), 4-2 (Time Value of Money), and 4-3 (Banks and the Creation of Money), all due on April 11th. [3/21]
5. Discussion on the functions of money, the types of money, and what money aggregates (M1, M2, and M3) are. Assignments: Read Module 26; in notebook, answer Checking for Understanding #2 (p. 260), M/C #1-5 (p. 260), and FRQ #2 (p. 260); and complete Activity 4-6 (The Fed and Central Banking), due April 11th. [3/22]
Have a great Spring Break! See you on Monday, April 1st.
6. Introduction to the structure and operations of the Federal Reserve System (i.e. the Fed) and how the Fed conducts monetary policy. Assignments: Read Module 25; in notebook, answer Checking for Understanding #1 & 3 (p. 252), M/C #1-5 (p.252), and FRQ #2 (p.253); and complete Activity 4-7 (Monetary Policy), due April 11th. [4/1]
7. Introduced concepts of T-accounts, money creation by banking system, and monetary policy. Assignments: Read Module 27; in notebook, answer Checking for Understanding #1 (p. 266), M/C #1-5(p. 266), FRQ #1 (p. 266); and complete Activities 4-4 (The Money Market) and 4-8 (Quantity Theory of Money), both due April 11th. [4/2]
8. Discussion on the traditional monetary policy tools of the Fed: open market operations (OMO); the discount rate; the federal funds rate; and the reserve ratio. Also introduced the money market model, with the nominal interest rate and the quantity of money being graphed. Assignments: Read Module 28; in notebook, answer Checking for Understanding #2 (p.274), M/C #1-5 (p. 274), and FRQ #2 (p. 275); and complete Activity 4-9 (Real v. Nominal Interest Rates), due April 11th. [4/3]
9. Discussion on the new monetary policy tools introduced during the Great Recession of 2007-09, along with examples of how the Fed conducts monetary policy. Assignments: Read Module 29; in notebook, answer Checking for Understanding #1 & 3 (p. 285), M/C #1-5 (p.266); and complete Activity 5-5 (Monetary Policy and Fiscal Policy Interactions), due April 11th. [4/4]
10. Discussion on the interaction between the Loanable Funds Market and the Money Market. Assignments: In notebook, answer Checking for Understanding #2 (p. 285), and FRQ #2 (p. 286). [4/5 and 4/8]
11. Review for Unit 4 exam on the financial sector. [4/9]
12. Unit 4 exam on on the financial sector for the next two days. Free Response Questions portion taken on Wednesday April 10, and the Multiple-Choice portion taken on Thursday April 11. [4/10-11]
13. Assignments: Read Module 30; in notebook, answer Checking for Understanding #1 & 4 (p.302), M/C #1-5 (p. 303), and FRQ #2 (p. 303); complete Activities 5-3 (Monetary and Fiscal Policy), 5-4 (Policy Effects on Aggregate Supply), and 5-6 (Deficits and the Debt), all due April 22nd. [4/11]