Macroeconomic Models. Tutorial Cluster 3. Screenshots

Description

Tutorial Cluster 3 includes tutorials 7 to 9 of Macroeconomic Models.

While tutorials 2 to 6 focus on real variables - like the economys output and employment - tutorials 7 to 9 focus on the nominal variables of financial claims. As reviewed in tutorial 7 money is one such claim that differs from other financial claims since it is a medium of exchange and carries no interest.

The central bank affects the money supply by way of monetary policy instruments like OMOs as reflected in the money multiplier.

Tutorial 8 reviews how other financial claims than money may be used to transfer purchasing power from savers to investors, often facilitated by financial intermediaries. Other financial claims than money are traded in the financial markets. There is a close relationship between the price of a financial claim like a bond and its nominal and real interest rates.

Tutorial 9 reviews the economys money market. On the money market money is in demand due to its feature as a medium of exchange. However, holding money people forego interest earnings and the higher the nominal interest rate the greater the loss. Consequently, peoples demand for money varies negatively with the nominal interest rate (and positively with GDP).

The money supply is assumed to be determined by the central bank (exogenous money supply).

Key topics of Tutorial 7:

Money as a claim on output vs. other financial claims.
Liquidity.
The features of money. Money as a medium of exchange.
Currency; bank liquidity; the monetary base.
The definitions of money (M1, M2 , etc.).
Banks reserve ratio; peoples currency ratio.
Money creation.
The money multiplier and the money supply.
Open Market Operations (OMOs) .

Key topics of Tutorial 8:

Saving, investment and financial claims.
Bonds.
A bonds face value, coupon rate, coupon payment, capital gain and yield to maturity.
The nominal interest rate.
Bond prices and the nominal interest rate.
The expected inflation rate and the real interest rate.
Other financial claims than bonds.
Financial institutions and financial intermediaries.

Key topics of Tutorial 9:

Investing a financial surplus.
The tradeoff between holding money and interest bearing bonds.
The firms and the economys demand for real money balances.
The economys money demand function/money demand curve.
The central banks supply of real money balances.
Shifts of the demand and supply curves for real money balances.
Exogenous money supply.
Equilibrium in the money market.
The channel through which the money supply affects the nominal interest rate.


Tutorial Cluster 3 includes 3 out of 15 tutorials in macroeconomic models. The tutorials present macroeconomic models in a fabulous new, innovative and interactive design. The tutorials animated graphics with voice over goes beyond the static texts and graphics of traditional textbooks and e-books and introduce a wholly new and dynamic approach to learning economics.

The tutorials clarity and focused structure supported by case studies and an interactive design facilitates the understanding of macroeconomic models and their application to reality.

Macroeconomic Models lets you review a particular model in about 15 minutes or the main models of most P-of-M courses in less than 4 hours - on your iPad wherever and whenever you wish.

Each of the 15 tutorials includes a glossary of macroeconomic terms and concepts.

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