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Ch 117: Understanding Banking & Financial Markets

About This Chapter

Gain a greater understanding of banking and financial markets by reviewing the lessons in this study guide. Learn about the types of financial assets and about the money supply as you complete these lessons.

Understanding Banking & Financial Markets - Chapter Summary

The instructors in this study guide have created in-depth, yet concise lessons that will teach you about banking and financial markets. As you review the content in these lessons, your knowledge of how money works will be broadened, as well as your understanding of the other financial assets that exist. Information about the reserve will be reviewed, and you will understand how these different markets affect the economy. After you have complete these lessons, you will know how to:

  • Categorize financial assets
  • Explain the fractional reserve system
  • Review the economics of demand
  • Discuss the money & multiplier effects
  • Examine the money market
  • Explain how money is made

Use each lesson and its assessments to learn and check your learning as you complete the lessons. The personal dashboard is a feature that you can use to track your progress and performance, which will help you set goals as you complete the study guide. If you need additional help, or have questions about the content, use the ask-an-expert feature.

7 Lessons in Chapter 117: Understanding Banking & Financial Markets
Test your knowledge with a 30-question chapter practice test
Types of Financial Assets: Money, Stocks & Bonds

1. Types of Financial Assets: Money, Stocks & Bonds

For an economy to operate effectively, consumers and businesses need a common medium of exchange and mechanisms to encourage some people to save, others to borrow and others to invest. In any modern economy, these needs are met with money, stocks and bonds.

Measuring the Money Supply: Explanation and Examples

2. Measuring the Money Supply: Explanation and Examples

Discover how the Federal Reserve defines the money supply by exploring the components of the money stock. In this lesson, we also look at the money supply in terms of function and liquidity.

Fractional Reserve System: Required and Excess Reserves

3. Fractional Reserve System: Required and Excess Reserves

This lesson provides an overview of basic banking concepts, illustrating how deposits turn into required reserves and excess reserves. It also covers how a bank accounts for these items on its balance sheet.

How Money Is Made: Understanding Bank Lending in the Economy

4. How Money Is Made: Understanding Bank Lending in the Economy

In this lesson, you'll learn how a single deposit in a local bank increases the money supply and filters through the economy with the help of the fractional reserve banking system.

Money and Multiplier Effect: Formula and Reserve Ratio

5. Money and Multiplier Effect: Formula and Reserve Ratio

In this lesson, explore the concept of the multiplier effect and the money multiplier. Then, learn the formula for calculating changes in the money supply.

Money Demand and Interest Rates: Economics of Demand

6. Money Demand and Interest Rates: Economics of Demand

Learn about the differences between money, wealth and income and explore the factors that determine the demand for money in an economy. Take a look at the demand curve for money as well.

The Money Market: Money Supply and Money Demand Curves

7. The Money Market: Money Supply and Money Demand Curves

This lesson explores an economic model describing the supply and demand for money in a nation, referred to as the money market. It also describes the central bank's role in controlling the money supply, which impacts interest rates and the greater economy.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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