Name: CHAPTER 1
Uploaded: 2024-10-18
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Description: CHAPTER 1. OVERVIEW OF THE STUDY ON MONEY, BANKING AND FINANCIAL MARKETS Prepared by: Fauziana Fauzi @ Mat Rawi.

CHAPTER 1. OVERVIEW OF THE STUDY ON MONEY, BANKING AND FINANCIAL MARKETS Prepared by: Fauziana Fauzi @ Mat Rawi. 

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OVERVIEW OF THE STUDY ON MONEY, BANKING AND FINANCIAL MARKETS
 Prepared by: Fauziana Fauzi @ Mat Rawi

Please refer to the text book on page 50 – 66 (13th edition).. 

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Please refer to the text book on page 50 – 66 (13th edition).

3. Financial Markets. bonds. stocks. Financial Institutions. 

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4. Inflation is a general increase in the prices of goods and services in an economy. This is usually measured using a consumer price index (CPI).. 

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Inflation is a general increase in the prices of goods and services in an economy. This is usually measured using a consumer price index (CPI).

5. Why Study Money, Banking & Financial Markets?. 

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Why Study Money, Banking & Financial Markets?

Why study Financial Institutions & Banking?

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7. Eg. of Financial Markets The Bond Market The Stock Market. 

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Eg. of Financial Markets

 The Bond Market

 The Stock Market

8. Financial Markets – Markets in which funds are transferred from people who have an excess of available funds to people who have a shortage.. 

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Financial Markets – Markets in which funds are transferred from people who have an excess of available funds to people who have a shortage.

Crucial to promoting greater economic efficiency by channeling funds from people who do not have a productive use for them to those who do.

Well-functioning financial markets are a key factor in producing high economic growth, and poorly-performing financial markets are one reason that many countries in the world remain desperately poor.

Activities in financial markets also have a direct effect on personal wealth, the behavior of businesses, and the cyclical performance of the economy.

9. Which country is the Richest Countries in the World?. 

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Which country is the Richest Countries in the World?

FACT! The Richest Countries in the World 2023. The Race To Be The World's Richest Country/Territory (GDP per capita, constant prices) 50,000 100,000 Ireland Luxembourg Singapore Qatar Macao SAR United Arab Emirates Switzerland Norway United States San Marino Brunei Darussalam Hong Kong SAR Denmark Netherlands Iceland Andorra E 89,558 88,221 87,963 82,655 80,035 78,926 75,583 74,598 73,386 72,973 69,779 68,998 145,196 142,490 133,895 124,834 2023 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023. 

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FACT! The Richest Countries in the World 2023

The Race To Be The World's Richest Country/Territory
(GDP per capita, constant prices)
50,000
100,000
Ireland
Luxembourg
Singapore
Qatar
Macao SAR
United Arab Emirates
Switzerland
Norway
United States
San Marino
Brunei Darussalam
Hong Kong SAR
Denmark
Netherlands
Iceland
Andorra
E
89,558
88,221
87,963
82,655
80,035
78,926
75,583
74,598
73,386
72,973
69,779
68,998
145,196
142,490
133,895
124,834
2023
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023

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12. What is Debt Market?. [image]. What is Interest Rates?. 

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A security (also called a financial instrument) is a claim on the issuer’s future income or assets (any financial claim or piece of property that is subject to ownership). A bond: A debt security that promises to make periodic payments for a specific period. Debt market, also often generically referred to as bond market is especially important to economic activity because they enables corporations and governments to borrow money to finance their activities and because it is where interest rates are determined.. 

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A security (also called a financial instrument) is a claim on the issuer’s future income or assets (any financial claim or piece of property that is subject to ownership). A bond: A debt security that promises to make periodic payments for a specific period.




 Debt market, also often generically referred to as bond market is especially important to economic activity because they enables corporations and governments to borrow money to finance their activities and because it is where interest rates are determined.

Interest rate – Cost of borrowing/the price paid for the rental of funds (usually expressed as a percentage of the rental). Types of interest rates – mortgage interest rates, car loan rates & interest rates on many different types of bonds. The Importance of interest rates: Personal level: High-interest rates might deter you from buying a house/a car because the cost of financing would be high. High interest rates might encourage saving because you can earn more interest income. High interest rates might cause a corporation to postpone building a new plant that would provide more jobs. Because changes in interest rates affect individuals, financial institutions, businesses, and the overall economy, it is important to explain substantial fluctuations in interest rates over the past 35 years.. 

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Interest rate – Cost of borrowing/the price paid for the rental of funds (usually expressed as a percentage of the rental). Types of interest rates – mortgage interest rates, car loan rates & interest rates on many different types of bonds. The Importance of interest rates: Personal level: High-interest rates might deter you from buying a house/a car because the cost of financing would be high.  High interest rates might encourage saving because you can earn more interest income.  High interest rates might cause a corporation to postpone building a new plant that would provide more jobs. Because changes in interest rates affect individuals, financial institutions, businesses, and the overall economy, it is important to explain substantial fluctuations in interest rates over the past 35 years.

Figure 1 Interest Rates on Selected Bonds, 1950–2017. 

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Figure 1 Interest Rates on Selected Bonds, 1950–2017

Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/TB3MS; https://fred.stlouisfed.org/series/GS10; https://fred.stlouisfed.org/series/BAA

[image] The vertical axis is labeled Interest Rate percent annual rate and ranges from 0 to 20 in increments of 5 The horizontal axis lists dates from 1950 to 2015 in 5 year increments The lines for each bond type keep fluctuating over the years The interest rates shown are as follows Three Month Treasury Bills 1950 1 0 percent 1955 0 75 percent 1960 4 0 percent 1965 3 75 percent 1970 7 0 percent 1975 8 0 percent 1980 9 0 percent 1985 7 0 percent 1990 7 5 percent 1995 3 5 percent 2000 5 0 percent 2005 1 0 percent 2010 0 percent 2015 0 percent Corporate Baa Bonds 1950 3 5 percent 1955 3 5 percent 1960 5 0 percent 1965 5 0 percent 1970 8 0 percent 1975 8 0 percent 1980 13 0 percent 1985 12 5 percent 1990 10 0 percent 1995 8 0 percent 2000 7 5 percent 2005 6 5 percent 2010 8 0 percent 2015 5 0 percent U S Government Long Term Bonds 1950 2 25 percent 1955 2 5 percent 1960 4 0 percent 1965 3 75 percent 1970 7 0 percent 1975 8 0 percent 1980 8 5 percent 1985 9 0 percent 1990 7 5 percent 1995 6 5 percent 2000 6 0 percent 2005 5 5 percent 2010 5 0 percent 2015 2 5 percent The values used in the description are approximate

Interest rates on several types of bonds can differ substantially

Dalam banyak – banyak nasi, nasi apa yang boleh bergerak sendiri?. 

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Dalam banyak – banyak nasi, nasi apa yang boleh bergerak sendiri?

Nasi goreng pattaya (sebab ada 4 tayar). 17. cru. 

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A common stock represents a share of ownership in a corporation. A security that is a claim on the earnings and assets of the corporation. Issuing stock and selling it to the public is a way for corporations to raise funds to finance their activities. A big swing in the prices of shares in the stock market is always a major story on the evening news. People often speculate on where the market is heading and get very excited when they can brag about their latest “big killing’ but they become depressed when they suffer a big loss. The attention the market receives can probably be best explained by one simple fact: It is a place where people can get rich or poor very quickly.. 

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A common stock represents a share of ownership in a corporation. A security that is a claim on the earnings and assets of the corporation. Issuing stock and selling it to the public is a way for corporations to raise funds to finance their activities. A big swing in the prices of shares in the stock market is always a major story on the evening news. People often speculate on where the market is heading and get very excited when they can brag about their latest “big killing’ but they become depressed when they suffer a big loss. The attention the market receives can probably be best explained by one simple fact: It is a place where people can get rich or poor very quickly.

The stock market is also an important factor in business investment decisions, because the price of shares affects the amount of funds that can be raised by selling newly issued stock to finance investment spending. A higher price for a firm’s share means that the firm can raise a larger amount of funds, which it can then use to buy production facilities and equipment.. 

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The stock market is also an important factor in business investment decisions, because the price of shares affects the amount of funds that can be raised by selling newly issued stock to finance investment spending. A higher price for a firm’s share means that the firm can raise a larger amount of funds, which it can then use to buy production facilities and equipment.

Figure 2 Stock Prices as Measured by the Dow Jones Industrial Average, 1950–2017. 

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Figure 2 Stock Prices as Measured by the Dow Jones Industrial Average, 1950–2017

Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/DJIA

[image] The vertical axis is labeled Dow Jones Industrial Average and ranges from 0 to 20 000 in increments of 2 000 The horizontal axis lists dates from 1950 to 2015 in 5 year increments The data shown are as follows 1950 100 1955 250 1960 500 1965 600 1970 500 1975 400 1980 600 1985 900 1990 2 500 1995 4 600 2000 11 700 2005 10 500 2010 10 000 2015 18 000 The values used in the description are approximate

TRY THIS!. (1) Financial markets promote economic efficiency by A) channeling funds from investors to savers. B) creating inflation. C) channeling funds from savers to investors. D) reducing investment.. 

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(1) Financial markets promote economic efficiency by 	A) channeling funds from investors to savers. 	B) creating inflation. 	C) channeling funds from savers to investors. 	D) reducing investment.

TRY THIS!. (2) Well-functioning financial markets promote A) inflation. B) deflation. C) unemployment. D) growth.. 

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(2) Well-functioning financial markets promote 	A) inflation. 	B) deflation. 	C) unemployment. 	D) growth.

TRY THIS. (3) High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving. A) discourage; encourage B) discourage; discourage C) encourage; encourage D) encourage; discourage. 

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(3) High interest rates might ________ purchasing a house or car but at the same time high 	interest rates might ________ saving. 	A) discourage; encourage 	B) discourage; discourage 	C) encourage; encourage 	D) encourage; discourage

Which country have the highest population in the world?. 

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Which country have the highest population in the world?

Fact! Countries with the Highest Populations. 26. 

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Fact! Countries with the Highest Populations

India
China
United States
Indonesia
Pakistan
Nigeria
Brazil
Bangladesh
Russia
Mexico
Ethiopia
Japan
I ,435.23
I ,425.49
340.91
278.68
242.85
226.46
21 7.04
1 73.83
1 44.2
128.93
128.12
22.96

Why Study Financial Institutions and Banking?. Banks and other financial institutions are what make financial markets work. Without them, financial markets would not be able to move funds from people who save to people who have productive investment opportunities.. 

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Why Study Financial Institutions and Banking?

Banks and other financial institutions are what make financial markets work. Without them, financial markets would not be able to move funds from people who save to people who have productive investment opportunities.

Structure of the Financial System. Complex, comprising many different types of private sector financial institutions – banks, insurance companies, mutual funds, finance companies, investment banks (heavily regulated by the gov.) If an individual wanted to make a loan to IBM/General Motors, he would lend to such a company indirectly through financial intermediaries – institutions that borrow funds from people who have saved and in turn make loans to people who need funds.. 

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Complex, comprising many different types of private sector financial institutions – banks, insurance companies, mutual funds, finance companies, investment banks (heavily regulated by the gov.) If an individual wanted to make a loan to IBM/General Motors, he would lend to such a company indirectly through financial intermediaries – institutions that borrow funds from people who have saved and in turn make loans to people who need funds.

Banks and Other Financial Institutions. Banks are financial institutions that accept deposits and make loans. Term banks includes firms – commercial banks, savings and loan associations, mutual savings bank and credit union. Banks are the financial intermediaries that the average person interacts with most frequently. A person who needs a loan to buy a house/a car usually obtains it from a local bank. Other financial institutions – insurance companies, finance companies, pension funds, mutual funds and investment banks have been growing at the expense of banks.. 

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Banks are financial institutions that accept deposits and make loans.  Term banks includes firms – commercial banks, savings and loan associations, mutual savings bank and credit union. Banks are the financial intermediaries that the average person interacts with most frequently. A person who needs a loan to buy a house/a car usually obtains it from a local bank. Other financial institutions – insurance companies, finance companies, pension funds, mutual funds and investment banks have been growing at the expense of banks.

TRY THIS!. (4) Financial institutions that accept deposits and make loans are called ________. A) exchanges B) banks C) over-the-counter markets D) finance companies. 

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(4) Financial institutions that accept deposits and make loans are called ________. 	A) exchanges 	B) banks 	C) over-the-counter markets 	D) finance companies

Why Study Money and Monetary Policy?. Money = money supply. Anything that is generally accepted as payment for goods and services or in the repayment of debts. Linked to changes in economic variables that affect all of us and are important to the health of the economy.. 

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Money = money supply. Anything that is generally accepted as payment for goods and services or in the repayment of debts. Linked to changes in economic variables that affect all of us and are important to the health of the economy.

Money and Business Cycle. Money plays an important role in generating business cycles, the upward and downward movement of aggregate output produced in the economy. Business cycles affect all of us in immediate and important ways. When output is rising, it is easier to find a good job; when output is falling, finding a job might be difficult. Figure 3: Rate of money growth declined before most recession, indicating that changes in money growth might be a driving forces behind business cycle fluctuations. However, declines in the rate of money growth are often not followed by a recession.. 

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Money plays an important role in generating business cycles, the upward and downward movement of aggregate output produced in the economy. Business cycles affect all of us in immediate and important ways. When output is rising, it is easier to find a good job; when output is falling, finding a job might be difficult. Figure 3: Rate of money growth declined before most recession, indicating that changes in money growth might be a driving forces behind business cycle fluctuations. However, declines in the rate of money growth are often not followed by a recession.

Figure 3 Money Growth (M2 Annual Rate) and the Business Cycle in the United States, 1950–2017. 

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Figure 3 Money Growth (M2 Annual Rate) and the Business Cycle in the United States, 1950–2017

Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/M2SL

[image] The vertical axis is labeled Money Growth Rate percent annual rate and ranges from 0 to 15 in increments of 5 The horizontal axis lists dates from 1950 to 2015 in 5 year increments The line for Money Growth Rate M2 keeps fluctuating over the years The data shown are as follows 1950 2 0 percent 1955 5 0 percent 1960 3 5 percent 1965 7 4 percent 1970 2 5 percent 1975 5 5 percent 1980 7 0 percent 1985 8 0 percent 1990 4 5 percent 1995 0 25 percent 2000 6 0 percent 2005 5 5 percent 2010 2 0 percent 2015 6 0 percent The values used in the description are approximate

1. 2. The Business Cycle. arn17456_0607. 3. 4. 1. 

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BUSINESS CYCLE PATTERN. Time (years). National Output. 

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Antara Petronas dan Shell, mana satu yang sesuai dibuat kawan?. 

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Antara Petronas dan Shell, mana satu yang sesuai dibuat kawan?

Petronas. Petronas Mesra, Shell Select. 37. ' —SELECT.. 

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Money and Inflation. Inflation – a continual increase in the price level, affects individuals, businesses and the government. It is generally regarded as an important problem to be solved and is often at the top of political and policy making agendas. What explain inflation? Plots the money supply vs the price level. The price level and the money supply generally rise together. Continuing increase in the money supply might be an important factor in causing the continuing increase in the price level that we call inflation.. 

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Inflation – a continual increase in the price level, affects individuals, businesses and the government. It is generally regarded as an important problem to be solved and is often at the top of political and policy making agendas. What explain inflation? Plots the money supply vs the price level. The price level and the money supply generally rise together. Continuing increase in the money supply might be an important factor in causing the continuing increase in the price level that we call inflation.

Figure 4 Aggregate Price Level and the Money Supply in the United States, 1960–2017. 

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Figure 4 Aggregate Price Level and the Money Supply in the United States, 1960–2017

Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/M2SL; https://fred.stlouisfed.org/series/GDPDEF

[image] The vertical axis is labeled Index 2009 equals 100 and ranges from 0 to 200 in increments of 25 The horizontal axis lists dates from 1960 to 2015 in 5 year increments The line for Money Supply M2 starts at 2 5 for 1960 and with slow growth rate reaches to 10 by the year 1975 The line shows a consistent growth over the year and reaches to a value of 25 by 1985 50 by 2000 75 by 2005 and 135 by the year 2015 The line for Aggregate Price Level GDP Deflator starts at 20 for the year 1960 and shows a consistent growth rate to reach a value of 25 by 1980 75 by 1990 100 by 2010 and 115 by 2015 The values used in the description are approximate

Figure 5: Show a positive association exists between inflation and the growth rate of the money supply. The countries with the highest inflation rates are also the ones with the highest money growth rates – Russia, Turkey. Japan and Euro area experienced low inflation rates and their rates of money growth were low.. 

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Figure 5: Show a positive association exists between inflation and the growth rate of the money supply.
 The countries with the highest inflation rates are also the ones with the highest money growth rates – Russia, Turkey. Japan and Euro area experienced low inflation rates and their rates of money growth were low.

Figure 5: Average Inflation Rate Versus Average Rate of Money Growth for Selected Countries, 2006–2016. 

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Figure 5: Average Inflation Rate Versus Average Rate of Money Growth for Selected Countries, 2006–2016

Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/

[image] The vertical axis is labeled Average Inflation Rate percent annual rate and ranges from 0 to 10 in increments of 1 The horizontal axis is labeled Average Money Growth Rate percent annual rate and ranges from 0 to 20 in increments of 2 The data shown for various countries are as follows Japan Average Money Growth Rate 2 8 percent Average Inflation Rate 0 2 percent Euro area Average Money Growth Rate 5 25 percent Average Inflation Rate 1 5 percent United Kingdom Average Money Growth Rate 5 25 percent Average Inflation Rate 2 5 percent United States Average Money Growth Rate 6 5 percent Average Inflation Rate 1 75 percent Canada Average Money Growth Rate 7 5 percent Average Inflation Rate 1 5 percent South Korea Average Money Growth Rate 8 5 percent Average Inflation Rate 2 3 percent South Africa Average Money Growth Rate 8 6 percent Average Inflation Rate 6 3 percent Mexico Average Money Growth Rate 10 percent Average Inflation Rate 4 percent Poland Average Money Growth Rate 10 2 percent Average Inflation Rate 2 1 percent Indonesia Average Money Growth Rate 14 percent Average Inflation Rate 6 percent Brazil Average Money Growth Rate 14 1 percent Average Inflation Rate 6 25 percent Turkey Average Money Growth Rate 17 percent Average Inflation Rate 8 percent Russia Average Money Growth Rate 17 5 percent Average Inflation Rate 9 25 percent The values used in the description are approximate

Milton Friedman – Inflation is always and everywhere a monetary phenomenon.. 

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Milton Friedman – Inflation is always and everywhere a monetary phenomenon.

Money and Interest Rates. Money plays an important role in interest-rate fluctuations, which are of great concern to business and consumers. Figure 6: Shows changes in the interest rate on long-term treasury bonds and the rate of money growth from 1950 to 2017. As the money growth rate rose in the 1960s and 1970s, the long-term bond rate rose with it.. 

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Money plays an important role in interest-rate fluctuations, which are of great concern to business and consumers. Figure 6: Shows changes in the interest rate on long-term treasury bonds and the rate of money growth from 1950 to 2017. As the money growth rate rose in the 1960s and 1970s, the long-term bond rate rose with it.

Figure 6 Money Growth (M2 Annual Rate) and Interest Rates (Long-Term U.S. Treasury Bonds), 1950–2017. 

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Figure 6 Money Growth (M2 Annual Rate) and Interest Rates (Long-Term U.S. Treasury Bonds), 1950–2017

Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/M2SL; https://fred.stlouisfed.org/series/GS10; https://fred.stlouisfed.org/series/M2SL

[image] The vertical axis on the left is labeled Interest Rate percent and ranges from negative 2 to 16 in increments of 2 The vertical axis on the right is labeled Money Growth Rate percent annual rate and ranges from negative 2 to 16 in increments of 2 The horizontal axis lists dates from 1950 to 2015 in 5 year increments The data shown are as follows 1950 Money growth rate 1 9 percent Interest rate 2 1 percent 1955 Money growth rate 6 3 percent Interest rate 2 1 percent 1960 Money growth rate 4 0 percent Interest rate 4 1 percent 1965 Money growth rate 7 5 percent Interest rate 4 2 percent 1970 Money growth rate 2 0 percent Interest rate 6 0 percent 1975 Money growth rate 4 0 percent Interest rate 5 1 percent 1980 Money growth rate 6 0 percent Interest rate 10 0 percent 1985 Money growth rate 7 5 percent Interest rate 10 2 percent 1990 Money growth rate 5 5 percent Interest rate 8 0 percent 1995 Money growth rate 0 25 percent Interest rate 8 0 percent 2000 Money growth rate 6 0 percent Interest rate 6 0 percent 2005 Money growth rate 4 0 percent Interest rate 4 5 percent 2010 Money growth rate 2 5 percent Interest rate 3 5 percent 2015 Money growth rate 7 0 percent Interest rate 2 0 percent The values used in the description are approximate

TRY THIS!. (5) Money is defined as A) bills of exchange. B) anything that is generally accepted in payment for goods and services or in the repayment of debt. C) a risk-free repository of spending power. D) the unrecognized liability of governments.. 

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(5) Money is defined as 	A) bills of exchange. 	B) anything that is generally accepted in payment for 	goods and services or in the repayment of debt. 	C) a risk-free repository of spending power. 	D) the unrecognized liability of governments.

TRY THIS!. (6) During a recession, output declines resulting in A) lower unemployment in the economy. B) higher unemployment in the economy. C) no impact on the unemployment in the economy. D) higher wages for the workers.. 

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(6) During a recession, output declines resulting in  	A) lower unemployment in the economy. 	B) higher unemployment in the economy. 	C) no impact on the unemployment in the economy. 	D) higher wages for the workers.

Conduct of Monetary Policy. Because money affects many economic variables that are important to the well-being of our economy, politicians and policy makers throughout the world care about the conduct of monetary policy – the management of money and interest rates. The organization responsible for the conduct of a nation’s monetary policy is the central bank. The Malaysia’s Central Bank is Bank Negara Malaysia.. 

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Because money affects many economic variables that are important to the well-being of our economy, politicians and policy makers throughout the world care about the conduct of monetary policy – the management of money and interest rates. The organization responsible for the conduct of a nation’s monetary policy is the central bank. The Malaysia’s Central Bank is Bank Negara Malaysia.

Fiscal Policy and Monetary Policy. Fiscal policy involves decisions about government spending and taxation. A budget deficit is an excess of government expenditures with respect to tax revenues for a particular time period, typically a year. Budget surplus arises when tax revenues exceed government expenditures. The government must finance any budget deficit by borrowing, whereas a budget surplus leads to a lower government debt burden.. 

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Fiscal policy involves decisions about government spending and taxation. A budget deficit is an excess of government expenditures with respect to tax revenues for a particular time period, typically a year. Budget surplus arises when tax revenues exceed government expenditures. The government must finance any budget deficit by borrowing, whereas a budget surplus leads to a lower government debt burden.

Figure 7 Government Budget Surplus or Deficit as a Percentage of Gross Domestic Product, 1950–2016. 

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Figure 7 Government Budget Surplus or Deficit as a Percentage of Gross Domestic Product, 1950–2016

Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/M2SL; https://fred.stlouisfed.org/series/FYFSGDA188Sl

[image] The vertical axis is labeled Percent of GDP and ranges from 0 to 4 in increments of 1 above the horizontal axis and 0 to 10 in increments of 1 below the horizontal axis The horizontal axis lists dates from 1950 to 2015 in 5 year increments The line starts from 1 below the horizontal axis and crosses the horizontal axis quickly to reach to a value of 1 8 and then falls to 1 75 below the horizontal axis The line turns upward and reaches to 0 5 below the horizontal axis for 1955 The line once again crosses the horizontal axis and reaches to 0 75 above it but falls back quickly to 2 5 below the horizontal axis for 1960 The line keeps on fluctuating and crosses the horizontal axis once again in 1970 to a value of 0 2 above the horizontal axis The line falls down to 3 5 for 1980 The line remains fluctuating below the horizontal axis until 1995 where it slopes upward and crosses the horizontal axis and reaches to a value of 2 0 for 1998 falls down to 3 5 for 2003 and to 9 9 for 2009 The line recovers back but remains below the horizontal axis thereafter The area under the graph above the horizontal axis is labeled as Surplus while that below the horizontal axis is labeled as Deficit The values used in the description are approximate

TRY THIS!. (7) ________ policy involves decisions about government spending and taxation. A) Monetary B) Fiscal C) Financial D) Systemic. 

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(7) ________ policy involves decisions about government spending and taxation. 	A) Monetary 	B) Fiscal 	C) Financial 	D) Systemic

CHAPTER 1 slide3-hotlink116

 Inflation is a general increase in the prices of goods and services in an economy. This is usually measured using a consumer price index (CPI).

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 Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/TB3MS; https://fred.stlouisfed.org/series/GS10; https://fred.stlouisfed.org/series/BAA

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 Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/DJIA

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 Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/M2SL

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 Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/M2SL; https://fred.stlouisfed.org/series/GDPDEF

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 Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/

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 Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/M2SL; https://fred.stlouisfed.org/series/GS10; https://fred.stlouisfed.org/series/M2SL

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 Source: Federal Reserve Bank of St. Louis, FRED database: https://fred.stlouisfed.org/series/M2SL; https://fred.stlouisfed.org/series/FYFSGDA188Sl