The document discusses the monetary system and the role of money. It describes how money serves as a medium of exchange, unit of account, and store of value. It also explains how the Federal Reserve regulates the US monetary system by controlling the money supply through open market operations and adjusting reserve requirements or the discount rate. Additionally, it covers how fractional-reserve banking allows banks to multiply the money supply through lending deposits.
The document discusses John Maynard Keynes' theory of aggregate demand and how it provides an alternative to classical economic theory. It introduces Keynes' view that low aggregate demand is responsible for economic downturns and high unemployment. It then presents the IS-LM model as the leading interpretation of Keynes' work, showing how it uses the IS and LM curves to determine equilibrium income levels based on interest rates, investment, consumption and money supply changes. The document also discusses how the IS-LM model can be used to analyze the effects of fiscal and monetary policy on aggregate demand.
The document discusses the functions and types of money, how banks create money through fractional-reserve banking, and how the money supply is affected. It explains that money serves as a medium of exchange, unit of account, and store of value. Banks hold reserves and make loans, increasing the money supply through the money multiplier effect. The Federal Reserve uses tools like open market operations and reserve requirements to influence the money supply and inflation.
The velocity of money refers to how often a unit of currency is used to purchase goods and services within an economy over a specific time period, usually one year. It is calculated by dividing the total value of economic transactions (GDP) by the total money supply. In a simple example of a three person economy, a Rs100 note changed hands three times to facilitate Rs300 worth of transactions, giving a velocity of money of three. Understanding the velocity of money provides insight into how rapidly money moves through an economy and its impact on economic growth.
This document discusses Gross Domestic Product (GDP) and its measurement. It begins by defining GDP as the market value of all final goods and services produced within a country in a given period of time. It then explains the components of GDP - consumption, investment, government purchases, and net exports. The document provides examples and exercises to illustrate real GDP versus nominal GDP, and how to compute GDP, real GDP, and the GDP deflator.
Saving, Investment, and the Financial SystemTuul Tuul
The document discusses the financial system and how it relates to saving, investment, and the allocation of resources in the economy. It describes how financial institutions like banks and markets help match savers with borrowers. It explains different types of financial institutions and markets, including stocks, bonds, banks, and mutual funds. It also discusses how government policies around taxes and spending can influence saving and investment in the economy.
The document discusses interest rates and bond yields. It covers two main theories of how interest rates are determined: the loanable funds theory and liquidity preference theory. The loanable funds theory states that interest rates are determined by the supply and demand of loanable funds in the market. The liquidity preference theory argues that interest rates are determined by the supply of money and demand to hold money. The document also discusses how various economic factors can influence interest rate movements. It defines bond yields and the yield to maturity calculation.
This document discusses the gains from international trade. It defines gains from trade as the advantages that countries enjoy through specialization and division of labor when participating in international trade. There are static and dynamic gains. Static gains come from short-term reallocation to comparative advantage sectors, while dynamic gains accumulate over time through factors like increased productivity and investment. Countries can measure gains from trade through approaches looking at reduced production costs, improved terms of trade, and increases in real income. Smaller countries tend to benefit more from trade than larger countries due to greater opportunities for specialization.
The document discusses John Maynard Keynes' theory of aggregate demand and how it provides an alternative to classical economic theory. It introduces Keynes' view that low aggregate demand is responsible for economic downturns and high unemployment. It then presents the IS-LM model as the leading interpretation of Keynes' work, showing how it uses the IS and LM curves to determine equilibrium income levels based on interest rates, investment, consumption and money supply changes. The document also discusses how the IS-LM model can be used to analyze the effects of fiscal and monetary policy on aggregate demand.
The document discusses the functions and types of money, how banks create money through fractional-reserve banking, and how the money supply is affected. It explains that money serves as a medium of exchange, unit of account, and store of value. Banks hold reserves and make loans, increasing the money supply through the money multiplier effect. The Federal Reserve uses tools like open market operations and reserve requirements to influence the money supply and inflation.
The velocity of money refers to how often a unit of currency is used to purchase goods and services within an economy over a specific time period, usually one year. It is calculated by dividing the total value of economic transactions (GDP) by the total money supply. In a simple example of a three person economy, a Rs100 note changed hands three times to facilitate Rs300 worth of transactions, giving a velocity of money of three. Understanding the velocity of money provides insight into how rapidly money moves through an economy and its impact on economic growth.
This document discusses Gross Domestic Product (GDP) and its measurement. It begins by defining GDP as the market value of all final goods and services produced within a country in a given period of time. It then explains the components of GDP - consumption, investment, government purchases, and net exports. The document provides examples and exercises to illustrate real GDP versus nominal GDP, and how to compute GDP, real GDP, and the GDP deflator.
Saving, Investment, and the Financial SystemTuul Tuul
The document discusses the financial system and how it relates to saving, investment, and the allocation of resources in the economy. It describes how financial institutions like banks and markets help match savers with borrowers. It explains different types of financial institutions and markets, including stocks, bonds, banks, and mutual funds. It also discusses how government policies around taxes and spending can influence saving and investment in the economy.
The document discusses interest rates and bond yields. It covers two main theories of how interest rates are determined: the loanable funds theory and liquidity preference theory. The loanable funds theory states that interest rates are determined by the supply and demand of loanable funds in the market. The liquidity preference theory argues that interest rates are determined by the supply of money and demand to hold money. The document also discusses how various economic factors can influence interest rate movements. It defines bond yields and the yield to maturity calculation.
This document discusses the gains from international trade. It defines gains from trade as the advantages that countries enjoy through specialization and division of labor when participating in international trade. There are static and dynamic gains. Static gains come from short-term reallocation to comparative advantage sectors, while dynamic gains accumulate over time through factors like increased productivity and investment. Countries can measure gains from trade through approaches looking at reduced production costs, improved terms of trade, and increases in real income. Smaller countries tend to benefit more from trade than larger countries due to greater opportunities for specialization.
1) Aggregate demand is the total demand for goods and services in an economy, including household spending, investment spending, government spending, exports and imports.
2) A rise in the price level causes aggregate demand to contract as real incomes fall, exports become less competitive, and interest rates may rise.
3) Shifts in aggregate demand, caused by factors like fiscal policy changes, monetary policy changes, or external economic events, impact the overall level of output in an economy.
The presentation is an effort towards better understanding of the IAS-37, through the use of proper headings, bullets, key points and graphics where needed.
Monetary means relating to money, especially the total amount of money in a country. [business] Some countries tighten monetary policy to avoid inflation. Synonyms: financial, money, economic, capital More Synonyms of monetary.
Friedman developed a theory of demand for money that asserts it is a function of total wealth, the division of wealth between human and non-human forms, rates of return on various assets, and other influences on tastes and preferences. His demand for money function includes variables like income, asset prices, and interest rates. Empirical studies found the demand for money is stable and more related to permanent income than current income. For underdeveloped countries, demand may be interest-inelastic and influenced more by expected price changes than interest rates due to financial and economic dualism.
The document discusses factors that determine the money supply and the money multiplier. It defines the monetary base (MB) as currency in circulation plus reserves, and M1 as currency plus checkable deposits. The money multiplier relates these, with M1 equal to the multiplier times MB. The multiplier depends on the currency ratio, reserve ratio, and excess reserves ratio. Changes in these ratios, such as due to bank panics, can impact the money supply by altering the multiplier. The Fed has more control over MB than M1 due to additional influencing factors.
The document discusses gross domestic product (GDP) as a key measure of economic activity. It defines GDP as the total market value of all final goods and services produced within an economy in a given period. GDP equals the sum of consumption, investment, government spending, and net exports. While GDP is an important indicator of economic well-being, it does not capture all factors like leisure time, environmental quality, and non-market activities. The document also distinguishes nominal GDP based on current prices versus real GDP using constant prices adjusted for inflation.
International financial management ppt bec bagalkot mbaBabasab Patil
The document describes an overview of a course in international financial management. It covers topics such as foreign exchange markets, managing foreign exchange risk, international corporate finance issues, international investment analysis, and corporate strategy for foreign investment. The course examines the global financial system, international monetary arrangements, and the functioning of the foreign exchange market.
This document provides an overview of the circular flow of income model in economics. It defines the circular flow of income as the cycle of generation, distribution, and circulation of income between households and firms. The key sectors in an economy are identified as households, firms, government, and the foreign sector. Households own factors of production and receive income from selling these factors to firms. Firms combine factors of production to produce goods and services and pay income to households. Households then use their income to purchase goods and services from firms, completing the circular flow. The assumptions, workings, phases and types of the circular flow model are also outlined.
The document discusses concepts related to open economies, including exports, imports, net exports, exchange rates, and purchasing power parity. It defines key terms like open vs. closed economies, nominal vs. real exchange rates, and how exchange rates are determined by purchasing power parity theory. It also examines how exchange rates and other factors influence trade balances and net exports.
The document discusses the spot and forward foreign exchange markets. The spot market involves transactions that are settled within two business days at the spot exchange rate. The forward market involves contracts agreed upon today but settled at a predetermined future date at a fixed exchange rate. There are various types of participants and transactions in each market, including spot deals between currencies, outright forwards that lock in rates for future delivery, and swaps that involve simultaneous spot and forward currency trades.
The document discusses several key macroeconomic indicators used to measure and understand a country's economy. It begins by explaining GDP as the total market value of all final goods and services produced within a country in a given period of time. It then discusses how GDP is calculated using the expenditure, income, and value added approaches. The document also covers other indicators like GNP, inflation rates, unemployment rates, and underemployment rates. It explains how to interpret and compare these figures across countries.
Chap 23, Measuring a Nation’s Income.pptmusanif shah
The document discusses key concepts in macroeconomics including:
- Gross Domestic Product (GDP) measures the total income and expenditures in an economy in a given period.
- GDP is divided into consumption, investment, government purchases, and net exports.
- Nominal GDP uses current prices while real GDP uses constant prices to measure production adjusted for inflation.
- While GDP is a good measure of economic well-being, it does not capture all aspects of quality of life.
The document summarizes the aggregate supply (AS) and aggregate demand (AD) model. It defines AS and AD as relationships between price levels and real GDP. The intersection of the AS and AD curves determines equilibrium output and price levels. The document outlines the components of aggregate demand as consumption, investment, government spending, and net exports. It also discusses factors that can cause shifts in the AS and AD curves, such as income, wealth, interest rates, and exchange rates.
This chapter discusses capital budgeting techniques used to evaluate long-term investment projects. It covers the payback period method, which calculates the number of years to recover the initial investment of a project from its cash inflows. The chapter provides examples of calculating payback periods for projects and discusses the pros and cons of the payback method, noting it does not take the time value of money into account but is intuitive. It also introduces net present value and internal rate of return techniques.
measuring the cost of living
Consumer Price Index
How the CPI Is Calculated
Problems with the CPI
Contrasting the CPI and GDP Deflator
Correcting Variables for Inflation:
This chapter discusses key concepts related to the time value of money including present and future values, compounding, discounting, and internal rate of return. It defines time preference for money and explains how risk and investment opportunities influence required rates of return. Methods for calculating future and present values of lump sums, annuities, perpetuities, and growing annuities are presented. The chapter also introduces net present value and internal rate of return.
Consumption and investment are the two components of aggregate demand in a simple two-sector macroeconomic model that assumes no government or foreign trade. Consumption is determined by disposable income and other factors, while savings is the portion of disposable income not consumed. The marginal propensity to consume measures how consumption changes with income, and is between 0 and 1. Determinants of consumption and savings include income, interest rates, prices, wealth, and demographic factors.
This document discusses the relationship between risk and return in investments. It defines total risk as the sum of systematic and unsystematic risk. Systematic risk stems from external market factors that affect all investments, while unsystematic risk is specific to a particular company. The expected return and risk of individual stocks varies, with higher risk investments generally offering higher returns. A portfolio combines multiple assets to reduce overall risk through diversification. The portfolio risk depends on the covariance and correlation between the individual assets' returns. Diversifying across assets with low correlation is an effective way to reduce risk.
This document provides an introduction to key concepts in corporate finance including what corporate finance is, its relationship to financial accounting and management accounting, the concepts of risk and return and time value of money. It discusses corporate structure including sole proprietorships, partnerships and corporations. It describes the finance function and role of the financial manager in raising, allocating and returning funds. It also covers separation of ownership and management and issues of agency theory and corporate governance.
The document discusses the monetary system and the role of money. It describes money as having three main functions: as a medium of exchange, a unit of account, and a store of value. It then discusses the US monetary system, the role of the Federal Reserve in regulating banks and money supply through open market operations and setting reserve requirements. Banks can expand the money supply through fractional-reserve banking and the money multiplier formula is used to calculate total money creation.
The document discusses money and the monetary system. It defines money and its key functions as a medium of exchange, unit of account, and store of value. It describes the Federal Reserve as the central bank that regulates the US monetary system and controls the money supply through tools like open market operations, reserve requirements, and interest rates. When banks make loans from their deposits, this increases the money supply through fractional-reserve banking and the money multiplier effect. However, the Fed's control over the money supply is imperfect as it cannot directly control lending or deposit amounts.
1) Aggregate demand is the total demand for goods and services in an economy, including household spending, investment spending, government spending, exports and imports.
2) A rise in the price level causes aggregate demand to contract as real incomes fall, exports become less competitive, and interest rates may rise.
3) Shifts in aggregate demand, caused by factors like fiscal policy changes, monetary policy changes, or external economic events, impact the overall level of output in an economy.
The presentation is an effort towards better understanding of the IAS-37, through the use of proper headings, bullets, key points and graphics where needed.
Monetary means relating to money, especially the total amount of money in a country. [business] Some countries tighten monetary policy to avoid inflation. Synonyms: financial, money, economic, capital More Synonyms of monetary.
Friedman developed a theory of demand for money that asserts it is a function of total wealth, the division of wealth between human and non-human forms, rates of return on various assets, and other influences on tastes and preferences. His demand for money function includes variables like income, asset prices, and interest rates. Empirical studies found the demand for money is stable and more related to permanent income than current income. For underdeveloped countries, demand may be interest-inelastic and influenced more by expected price changes than interest rates due to financial and economic dualism.
The document discusses factors that determine the money supply and the money multiplier. It defines the monetary base (MB) as currency in circulation plus reserves, and M1 as currency plus checkable deposits. The money multiplier relates these, with M1 equal to the multiplier times MB. The multiplier depends on the currency ratio, reserve ratio, and excess reserves ratio. Changes in these ratios, such as due to bank panics, can impact the money supply by altering the multiplier. The Fed has more control over MB than M1 due to additional influencing factors.
The document discusses gross domestic product (GDP) as a key measure of economic activity. It defines GDP as the total market value of all final goods and services produced within an economy in a given period. GDP equals the sum of consumption, investment, government spending, and net exports. While GDP is an important indicator of economic well-being, it does not capture all factors like leisure time, environmental quality, and non-market activities. The document also distinguishes nominal GDP based on current prices versus real GDP using constant prices adjusted for inflation.
International financial management ppt bec bagalkot mbaBabasab Patil
The document describes an overview of a course in international financial management. It covers topics such as foreign exchange markets, managing foreign exchange risk, international corporate finance issues, international investment analysis, and corporate strategy for foreign investment. The course examines the global financial system, international monetary arrangements, and the functioning of the foreign exchange market.
This document provides an overview of the circular flow of income model in economics. It defines the circular flow of income as the cycle of generation, distribution, and circulation of income between households and firms. The key sectors in an economy are identified as households, firms, government, and the foreign sector. Households own factors of production and receive income from selling these factors to firms. Firms combine factors of production to produce goods and services and pay income to households. Households then use their income to purchase goods and services from firms, completing the circular flow. The assumptions, workings, phases and types of the circular flow model are also outlined.
The document discusses concepts related to open economies, including exports, imports, net exports, exchange rates, and purchasing power parity. It defines key terms like open vs. closed economies, nominal vs. real exchange rates, and how exchange rates are determined by purchasing power parity theory. It also examines how exchange rates and other factors influence trade balances and net exports.
The document discusses the spot and forward foreign exchange markets. The spot market involves transactions that are settled within two business days at the spot exchange rate. The forward market involves contracts agreed upon today but settled at a predetermined future date at a fixed exchange rate. There are various types of participants and transactions in each market, including spot deals between currencies, outright forwards that lock in rates for future delivery, and swaps that involve simultaneous spot and forward currency trades.
The document discusses several key macroeconomic indicators used to measure and understand a country's economy. It begins by explaining GDP as the total market value of all final goods and services produced within a country in a given period of time. It then discusses how GDP is calculated using the expenditure, income, and value added approaches. The document also covers other indicators like GNP, inflation rates, unemployment rates, and underemployment rates. It explains how to interpret and compare these figures across countries.
Chap 23, Measuring a Nation’s Income.pptmusanif shah
The document discusses key concepts in macroeconomics including:
- Gross Domestic Product (GDP) measures the total income and expenditures in an economy in a given period.
- GDP is divided into consumption, investment, government purchases, and net exports.
- Nominal GDP uses current prices while real GDP uses constant prices to measure production adjusted for inflation.
- While GDP is a good measure of economic well-being, it does not capture all aspects of quality of life.
The document summarizes the aggregate supply (AS) and aggregate demand (AD) model. It defines AS and AD as relationships between price levels and real GDP. The intersection of the AS and AD curves determines equilibrium output and price levels. The document outlines the components of aggregate demand as consumption, investment, government spending, and net exports. It also discusses factors that can cause shifts in the AS and AD curves, such as income, wealth, interest rates, and exchange rates.
This chapter discusses capital budgeting techniques used to evaluate long-term investment projects. It covers the payback period method, which calculates the number of years to recover the initial investment of a project from its cash inflows. The chapter provides examples of calculating payback periods for projects and discusses the pros and cons of the payback method, noting it does not take the time value of money into account but is intuitive. It also introduces net present value and internal rate of return techniques.
measuring the cost of living
Consumer Price Index
How the CPI Is Calculated
Problems with the CPI
Contrasting the CPI and GDP Deflator
Correcting Variables for Inflation:
This chapter discusses key concepts related to the time value of money including present and future values, compounding, discounting, and internal rate of return. It defines time preference for money and explains how risk and investment opportunities influence required rates of return. Methods for calculating future and present values of lump sums, annuities, perpetuities, and growing annuities are presented. The chapter also introduces net present value and internal rate of return.
Consumption and investment are the two components of aggregate demand in a simple two-sector macroeconomic model that assumes no government or foreign trade. Consumption is determined by disposable income and other factors, while savings is the portion of disposable income not consumed. The marginal propensity to consume measures how consumption changes with income, and is between 0 and 1. Determinants of consumption and savings include income, interest rates, prices, wealth, and demographic factors.
This document discusses the relationship between risk and return in investments. It defines total risk as the sum of systematic and unsystematic risk. Systematic risk stems from external market factors that affect all investments, while unsystematic risk is specific to a particular company. The expected return and risk of individual stocks varies, with higher risk investments generally offering higher returns. A portfolio combines multiple assets to reduce overall risk through diversification. The portfolio risk depends on the covariance and correlation between the individual assets' returns. Diversifying across assets with low correlation is an effective way to reduce risk.
This document provides an introduction to key concepts in corporate finance including what corporate finance is, its relationship to financial accounting and management accounting, the concepts of risk and return and time value of money. It discusses corporate structure including sole proprietorships, partnerships and corporations. It describes the finance function and role of the financial manager in raising, allocating and returning funds. It also covers separation of ownership and management and issues of agency theory and corporate governance.
The document discusses the monetary system and the role of money. It describes money as having three main functions: as a medium of exchange, a unit of account, and a store of value. It then discusses the US monetary system, the role of the Federal Reserve in regulating banks and money supply through open market operations and setting reserve requirements. Banks can expand the money supply through fractional-reserve banking and the money multiplier formula is used to calculate total money creation.
The document discusses money and the monetary system. It defines money and its key functions as a medium of exchange, unit of account, and store of value. It describes the Federal Reserve as the central bank that regulates the US monetary system and controls the money supply through tools like open market operations, reserve requirements, and interest rates. When banks make loans from their deposits, this increases the money supply through fractional-reserve banking and the money multiplier effect. However, the Fed's control over the money supply is imperfect as it cannot directly control lending or deposit amounts.
This document provides an overview of currency and the monetary system in the United States. It discusses the functions and characteristics of money, the development of the banking system and currency over time, and the creation of the Federal Reserve System in 1914 to serve as the central bank and oversee monetary policy. Key topics covered include the gold standard, the money multiplier effect of fractional-reserve banking, and the Federal Reserve's tools of conducting open market operations and setting reserve requirements and interest rates to influence the money supply.
The document discusses the functions and types of money, including how money serves as a medium of exchange, unit of account, and store of value. It describes the different components that make up the US money supply, such as currency, demand deposits, savings deposits, and money market funds. The document also provides an overview of the Federal Reserve System, including its structure with the Board of Governors and regional Federal Reserve Banks. It explains how the Federal Reserve uses open market operations, reserve requirements, and interest rates to influence the US money supply and achieve its monetary policy goals.
The Federal Reserve System is the central bank of the United States. It was established in 1913 with the enactment of the Federal Reserve Act in response to a series of financial panics. The Federal Reserve System has a three-part structure - the Board of Governors, the Federal Open Market Committee, and the 12 Federal Reserve Banks. It uses various monetary policy tools like open market operations, the discount rate, and reserve requirements to regulate the supply of money and achieve its mandates of maximum employment, stable prices, and moderate long-term interest rates. Despite its efforts, the Federal Reserve faces ongoing scrutiny over its ability to stimulate economic recovery in the aftermath of the late 2000s recession.
This document discusses the monetary system and the role of money and central banking. It explains that the Federal Reserve regulates the US monetary system and controls the money supply through tools like open market operations, reserve requirements, and interest rates. Commercial banks also influence the money supply through fractional-reserve banking, where they hold a portion of deposits as reserves and lend out the rest, expanding the overall money supply through the money multiplier effect.
This document discusses the monetary system and the role of money and central banking. It explains that the Federal Reserve regulates the US monetary system and controls the money supply through tools like open market operations, reserve requirements, and interest rates. Commercial banks also influence the money supply through fractional-reserve banking, where they hold a portion of deposits as reserves and lend out the rest, expanding the overall money supply through the money multiplier effect.
This document discusses the monetary system and the role of money and central banking. It explains that the Federal Reserve regulates the US monetary system and controls the money supply through tools like open market operations, reserve requirements, and interest rates. Commercial banks also influence the money supply through fractional-reserve banking, where they hold a portion of deposits as reserves and lend out the rest, expanding the overall money supply through the money multiplier effect.
The document provides an overview of money, banking, and financial institutions. It discusses the functions of money as a medium of exchange, unit of account, and store of value. It describes the components of the money supply, including M1 and M2 aggregates. It also outlines the organizational structure of the Federal Reserve System, including the regional Federal Reserve banks, Board of Governors, and Federal Open Market Committee. Additionally, it discusses the Federal Reserve's functions and independence, and provides context on the financial crisis of 2007-2008.
The document discusses the monetary system and the role of money and central banking. It describes how money serves as a medium of exchange, unit of account, and store of value. It explains how the Federal Reserve regulates the US monetary system by controlling the money supply through tools like open market operations, reserve requirements, and interest rates. It also discusses how fractional-reserve banking allows banks to create money when they issue loans.
The three main functions of money are as a medium of exchange, a unit of account, and as a store of value. Money must have six key characteristics - it must be durable, portable, divisible, stable in value, scarce, and universally accepted. The Federal Reserve, or the Fed, acts as the central bank of the United States and oversees the banking system and regulates the money supply. It performs governmental banking functions and uses tools like open market operations and interest rates to implement monetary policy and control inflation.
The Federal Reserve and Money SupplyTakes s.docxcherry686017
The Federal Reserve and Money Supply
*
Takes sections for chapters 10, 14, & 15 from the Mishkin text (9th edition), Federal Reserve reader, and www.federalreserve.gov
Chpt 10
3 key players
1. Depositors
2. Banks
3. Federal Reserve
Depositors are the most important providers of funds and they are the biggest users of fundsIf depositors lose confidence bank runs can occur, causing banks to lose their sources of funds If depositors have confidence banks have an increase amount of funds
Banks are the keepers of depositors funds
As before our deposits are their biggest liabilities, but their greatest assets
Balance Sheet is the most important document to understand the banking system
It is made up of two broad categories
Liabilities (Sources of Funds)
Assets (Uses of Funds)
Listed from most liquid to least liquid
Liabilities are simply the sources of funds
Checkable deposits
Payable on demand
Considered to be an asset for depositor (us)
Lowest cost of sources for banks we want easy access to liquidity
Only 6% of total liabilities (per the Fed)
Nontransaction deposits
CDs
Owners cannot write checks against such accounts
Primary source of bank funds (53% of bank liabilities)
Checkable deposits intterest paid on deposits has accounted for 25% of total bank operating expenses while the costs involved in servicing accounts (employee salaries, building, rent) has roughly 50% of operating expenses!
Liabilities Cont.
Discount Loans / Fed Fund (31% of liabilities)
Discount loans are loans from the Federal Reserve (also known as advances)
Typically 1%-pt above the fed funds rate
Banks typically do not want to borrow from the Fed unless absolutely necessary!
Fed Funds loan (overnight loans)
Federal funds are overnight borrowings by banks to maintain their bank reserves at the Federal Reserve
Transactions in the federal funds market allow banks with excess reserve balances to lend reserves to banks with deficient reserves
These loans are usually made for one day only (‘overnight’).
Bank Capital (10% of liabilities)
Banks keep reserves at Federal Reserve Banks to meet their reserve requirements and to clear financial transactions.
Typically referred to as the uses of fundsThe interest payments earned on them are what enable banks to make profits.
Reserve Requirements
These are deposits plus currency that is physically held by banks.
Reserves are made up by required reserves and excess reserves
Required Reserves: For every dollar of checkable deposits at a bank (a fraction must be kept as reserves)
Excess Reserves: The most liquid of all bank assets and the bank can use them to make other loans to banks (through the fed funds market) or other loans.
Cash Items in Collection Process
Checks in process of being cleared from another bank
Correspondent banking
Common in small banks
Small banks hold deposits in larger banks in exchange for a variety of services, including check collection, foreign exchange tran ...
The Influence of Monetary and Fiscal Policy on Aggregate DemandTuul Tuul
1. The document discusses how monetary and fiscal policy can influence aggregate demand in the short run through three main transmission mechanisms: interest rates, wealth effects, and exchange rates (for monetary policy) and changes in government spending and taxes (for fiscal policy).
2. It explains Keynes' theory of liquidity preference which holds that the interest rate adjusts to balance the supply and demand for money in the money market. Monetary policy shifts the money supply curve and thereby affects interest rates and aggregate demand.
3. Fiscal policy, like changes in government purchases, can shift aggregate demand directly but its multiplier effect on output may be partly offset by higher interest rates crowding out private investment.
The document discusses how the Federal Reserve responded to financial crises, including after 9/11 and the 2008 mortgage crisis. It describes actions the Fed took to increase liquidity and prevent panic, such as allowing banks to borrow more and purchasing government securities. This massive response after 9/11 helped prevent a financial panic. During the 2008 crisis, the Fed announced new programs to purchase corporate debt and extend loans to money market funds under pressure. These actions demonstrated the Federal Reserve's role as lender of last resort during times of financial distress.
This document is from a PowerPoint presentation that accompanies an economics textbook. It summarizes 10 principles of economics: 1) People face tradeoffs in decision making; 2) Rational people make decisions by comparing marginal costs and benefits; 3) Trade between individuals can make everyone better off. It also discusses the role of markets and governments in organizing economic activity and some macroeconomic concepts like productivity, inflation, and the short-run tradeoff between inflation and unemployment.
1. The document is a PowerPoint presentation that outlines 10 principles of economics from a textbook.
2. It discusses how individuals make decisions by weighing costs and benefits at the margin, and how people respond to incentives.
3. Markets are generally good for organizing economic activity, though governments can sometimes improve outcomes during market failures.
Case study is the most unsolved part in the Strategic management. There you need to highlight the case along with the academic knowledge. The key areas and the best solution are to be drawn every time. You might be thinking, how you can execute that easily, since you are having the least corporate exposure.
This document is a PowerPoint presentation summarizing the key principles of economics from the textbook "Principles of Economics" by N. Gregory Mankiw. It discusses 10 economic principles, including that individuals face tradeoffs in decision-making, rational people consider marginal costs and benefits, trade benefits all parties, and markets are generally efficient but governments can improve outcomes when markets fail. It also addresses the relationship between productivity, money supply, inflation, and unemployment.
The document discusses the U.S. financial system and how it coordinates saving and investment. It describes how financial institutions like banks and markets direct resources from savers to borrowers. It also explains how government policies on taxes, deficits, and investment credits can influence interest rates, saving, and investment in the market for loanable funds.
Discover the Future of Dogecoin with Our Comprehensive Guidance36 Crypto
Learn in-depth about Dogecoin's trajectory and stay informed with 36crypto's essential and up-to-date information about the crypto space.
Our presentation delves into Dogecoin's potential future, exploring whether it's destined to skyrocket to the moon or face a downward spiral. In addition, it highlights invaluable insights. Don't miss out on this opportunity to enhance your crypto understanding!
https://36crypto.com/the-future-of-dogecoin-how-high-can-this-cryptocurrency-reach/
The Impact of Generative AI and 4th Industrial RevolutionPaolo Maresca
This infographic explores the transformative power of Generative AI, a key driver of the 4th Industrial Revolution. Discover how Generative AI is revolutionizing industries, accelerating innovation, and shaping the future of work.
An accounting information system (AIS) refers to tools and systems designed for the collection and display of accounting information so accountants and executives can make informed decisions.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
13 Jun 24 ILC Retirement Income Summit - slides.pptxILC- UK
ILC's Retirement Income Summit was hosted by M&G and supported by Canada Life. The event brought together key policymakers, influencers and experts to help identify policy priorities for the next Government and ensure more of us have access to a decent income in retirement.
Contributors included:
Jo Blanden, Professor in Economics, University of Surrey
Clive Bolton, CEO, Life Insurance M&G Plc
Jim Boyd, CEO, Equity Release Council
Molly Broome, Economist, Resolution Foundation
Nida Broughton, Co-Director of Economic Policy, Behavioural Insights Team
Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute for Fiscal Studies
Joanna Elson CBE, Chief Executive Officer, Independent Age
Tom Evans, Managing Director of Retirement, Canada Life
Steve Groves, Chair, Key Retirement Group
Tish Hanifan, Founder and Joint Chair of the Society of Later life Advisers
Sue Lewis, ILC Trustee
Siobhan Lough, Senior Consultant, Hymans Robertson
Mick McAteer, Co-Director, The Financial Inclusion Centre
Stuart McDonald MBE, Head of Longevity and Democratic Insights, LCP
Anusha Mittal, Managing Director, Individual Life and Pensions, M&G Life
Shelley Morris, Senior Project Manager, Living Pension, Living Wage Foundation
Sarah O'Grady, Journalist
Will Sherlock, Head of External Relations, M&G Plc
Daniela Silcock, Head of Policy Research, Pensions Policy Institute
David Sinclair, Chief Executive, ILC
Jordi Skilbeck, Senior Policy Advisor, Pensions and Lifetime Savings Association
Rt Hon Sir Stephen Timms, former Chair, Work & Pensions Committee
Nigel Waterson, ILC Trustee
Jackie Wells, Strategy and Policy Consultant, ILC Strategic Advisory Board
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
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Madhya Pradesh, the "Heart of India," boasts a rich tapestry of culture and heritage, from ancient dynasties to modern developments. Explore its land records, historical landmarks, and vibrant traditions. From agricultural expanses to urban growth, Madhya Pradesh offers a unique blend of the ancient and modern.