RSM100EnviroPart1A - Macroeconomic Environment of Commerce...

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Macroeconomic Environment RSM 100 Macroeconomic Environment of Commerce Part 1: Some Lessons from the Past: (Sept 9 and 16) 1.A The Origins of Money 1.B The Evolution of Capitalism 1.C The World Economy since WW2
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Macroeconomic Environment RSM 100 Macroeconomic Environment of Commerce Part 2: Examining the Present: (Sept 23 and 30) Tracking the Current Recsssion and Recovery in the U.S. and Canada
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Macroeconomic Environment RSM 100 Macroeconomic Environment of Commerce Part 3: Macro Issues for the Future (Oct 7) (Test Oct 14) 3.A Productivity Growth 3.B Demographics 3.C Globalization; World Economic Imbalances 3.D Global Warming and the Environment
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Macroeconomic Environment RSM 100 Readings . All readings are from the text – Business, 6 th Canadian Edition , Griffin et. al. Section: Applies to: Chap. 1 pp. 1-29 Parts 1, 2 and 3 Chap. 2 pp. 36-49 Parts 1, 2 and 3 p. 68 Part 3B Chap. 3 pp. 82-86 Part 3D
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Macroeconomic Environment RSM 100 Readings Section: Applies to: Chap. 5 pp. 140-149 Parts 1, 2 and 3 pp. 154-163 Part 3C Chap. 9 pp. 274-279 Part 1B Chap. 12 pp. 368-374 Part 3A Chap 15 pp. 471-472 Part 3B
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Macroeconomic Environment RSM 100 Readings Section: Applies to: Chap 18 pp. 589-600 Part 1A, Part 2 pp. 603-605 Part 1A, Part 2 pp. 608-612 Parts 1, 2 and 3 The test will be based on the lectures, supplemented by the readings.
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Macroeconomic Environment RSM 100 1.A The Origin and Development of Money Money has three functions: 1. Method of Exchange - replaces barter 2. Store of Value – carry command over goods and services into the future 3. Unit of Account – a „common denominator‟ if different goods owned or traded
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Macroeconomic Environment RSM 100 • Gold (or other „precious‟ metals) worked best in early civilizations: • portable – compact; easily carried • divisible – gold is easily worked • durable – gold is chemically inert • stable in quantity – and relatively rare • Note: gold was otherwise useless, except for art or adornment – use as money based on trust that others would accept it
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Macroeconomic Environment RSM 100 The Origin of Coinage . Improved on use of metals for money by standardizing purity and weight . Counterfeiting and „clipping‟ soon followed
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Macroeconomic Environment RSM 100 The Origin of Coinage Antony and Cleopatra – Not quite the „Glam‟ couple we thought! (Note the coin edges – it discourages „clipping‟)
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Macroeconomic Environment RSM 100 The Origin of Coinage . Monarchs also would „debase the coinage‟: melt down existing coins, dilute with other metals and re-issue; with the extra for the monarch . BUT, often prices rose in response. Why? What is the relationship of money and prices?
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Macroeconomic Environment RSM 100 Money and Prices ( “Quantity Theory”) M x V = P x T where: M = Money supply (e.g., total coinage) V = „Velocity‟; how often money changes hands in a year P = Prices or Price level T = „Real‟ Transactions (e.g., number of bushels of wheat)
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This note was uploaded on 03/03/2011 for the course RSM 100 taught by Professor Oesch during the Spring '08 term at University of Toronto- Toronto.

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RSM100EnviroPart1A - Macroeconomic Environment of Commerce...

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