Slide 1Financial Instruments, Markets and Institutions Slide 2 Summary of Classification of Financial Markets Classification by nature of claim. –Debt market; Equity market…

Slide 1Unit 4: Money and Monetary Policy 1 Slide 2 The Money Market (Supply and Demand for Money) 2 Slide 3 The Demand for Money At any given time, people demand a certain…

Slide 1Unit 4: Money and Monetary Policy 1 Slide 2 The Money Market (Supply and Demand for Money) 2 Slide 3 The Demand for Money At any given time, people demand a certain…

Slide 1 Monetary Policy 1 When the FED adjusts the money supply to achieve the macroeconomic goals Slide 2 If the FED increases the money supply, a temporary surplus of money…

Unit 4: Money and Monetary Policy * The Money Market (Supply and Demand for Money) * * Interest Rates are important Way to protect our money from the effects of inflation…

Nominal Interest Rate (ir) Quantity of Money (billions of dollars) 20% 5% 2% 0 DMoney Inverse relationship between interest rates and the quantity of money demanded * The…