Department of Economics
UNIVERSITY OF BRITISH COLUMBIA
ECON 345
Money and Banking
September 2017
Professor Geoffrey Newman
[email protected]
Iona 153
Content: This course serves as an introduction to the broad area of money and finance. It
highlights t
Q1. If the Bank of Canada sells $2 million of bonds to the First National Bank, what happens to
reserves and the monetary base? Use T-accounts to explain your answer.
Answer:
Reserves and the monetary base fall by $2 million, as the following T-accounts i
1. If a switch occurs from deposits into currency, what happens to the overnight interest rate?
Use the supply and demand analysis of the market for reserves to explain your answer.
Answer: The switch from deposits into currency lowers the amount of reser
Chapter 7 (Stock Market, rational expectations, efficient market hypothesis)
Common Stock = corporations main way to raise equity capital
Shareholders important rights:
to vote
to be a residual claimant of all funds flowing into the firm (cash flows)
t
1. If a switch occurs from deposits into currency, what happens to the overnight interest rate?
Use the supply and demand analysis of the market for reserves to explain your answer.
The switch from deposits into currency lowers the amount of reserves as w
1. Suppose the money supply M has been growing at 10% per year, and nominal GDP, PY, has
been growing at 20% per year. The data are as follows (in billions of dollars):
2015 2016 2017
M
100
110
121
PY
1,000 1,200 1,440
Calculate the velocity for each year
345 THREE SECTOR MODEL WITH BANKING SYSTEM
AND UPWARD SLOPING MONEY SUPPLY CURVE
(Newman)
1. Define the Monetary Base (MB) and Money Supply in the simplest
way, where the latter is M1. C is currency, D is checkable deposits
and R is reserves. Let c = C/D
Yunyi Ou (Olivia)
Student #: 18952144
Assignment #2
When risk of money rises, bond demand increase and money demand decrease (Substitution
Effect), also due to the increasing risk in money market, the total wealth (Bond + Money) is
declining (Wealth Effec
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Announcements
Today:
Chp. 1 Intro to Financial Markets, Money and Banking
Chp 2 An Overview of the Financial System
Monday:
Chp 2 An Overview of the Financial System
Chp 3 Money
Problem Set 1: poste
Announcements
Today:
Chp 2 An Overview of the Financial System
Chp 3 Money
Problem Set 1 on MyLab due Thursday, Sept. 24th at 11pm
Fed MeeFng Ends Tomorrow.
Fri:
Chp 3 Money
Chp 4 Interest R
Big News
The VSE and UBC will compete in the BoC Monetary Policy
Compe:on
Informa:onal Mee:ng Thurs., 24 Sept 6pm Buch-A103
I will select the team according to the criteria on the
next pages
Announcements
Today:
The Fed Decision
Chp 3 Money
Problem Set 1 on MyLab due Thursday, Sept. 24th at 11pm
You will have two chances to work each quesGon since this is the rst
Gme you are using My
Announcements
Today:
I
Chp 4: Understanding Interest Rates
Wed.:
I
Chp 4: Understanding Interest Rates
Fri.:
I
Chp 4: Understanding Interest Rates
I
Chp 5: The Behaviour of Interest Rates
Problem Set on MyLab due Thursday, 8 Oct. at 11pm.
UBC BoC Monetary
Announcements
Today:
I
Chp 4: Understanding Interest Rates
Mon.
I
Chp 4: Understanding Interest Rates
Wed.
I
Chp 4: Understanding Interest Rates
Problem Set on MyLab due Thursday, 1 Oct. at 11pm.
UBC BoC Monetary Policy Competition Team
UBC BoC Monetary P
Welcome to Econ 345
Money and Banking
1
Econ 345: Money and Banking
Dr. Jerry McIntyre
Oce: 1026 Buchanan Tower
Oce Hrs: MW 11 12, BuTo 1026; F 11 12pm at the
Boulevard Caf.
E-mail: [email protected]
Telephone: 604-
Announcements
Today:
I
Chp 7: The Stock Market, the Theory of Rational
Expectations & the Efficient Market Hypothesis
I
Chp 15: Central Banks: the Bank of Canada (the BoC) and
the US Federal Reserve System (the Fed)
Monday:
I
Chp 15: Central Banks: the Ba
Announcements
Today:
Chp 2 An Overview of the Financial System
Chp 3 Money
Problem Set 1: posted on MyLab on Tuesday.
Wed:
Chp 3 Money
Fri:
Chp 3 Money
1
Important Events in Money & Ban
Announcements
Today:
I
Chp 5: The Behaviour of Interest Rates
Rest of Week WF:
I
Chp 5: The Behaviour of Interest Rates
Problem Set on MyLab due Thursday, 8 Oct. at 11pm.
Vancouver School of Economics Undergraduate Society
(VSEUS) invites you to an Econ W
Announcements
Today:
I
Chp 5: The Behaviour of Interest Rates
Friday:
I
Chp 5: The Behaviour of Interest Rates
Problem Set on MyLab due Thursday, 8 Oct. at 11pm.
Vancouver School of Economics Undergraduate Society
(VSEUS) invites you to an Econ Welcome Ev
Announcements
Today:
I
Chp 7: The Stock Market, the Theory of Rational
Expectations & the Efficient Market Hypothesis
I
Chp 15: Central Banks: the Bank of Canada (the BoC) and
the US Federal Reserve System (the Fed)
Friday:
I
Chp 15: Central Banks: the Ba
Announcements
Today:
I Chp 6: Risk and the Term Structure of Interest Rates
Problem Set on MyLab due Thursday, 22 Oct. at 11pm.
Wednesday:
I Chp 7: The Stock Market, the Theory of Rational
Expectations & the Efficient Market Hypothesis
Friday:
I Chp 7: Th
Announcements
Today:
I
Chp 4: Understanding Interest Rates
I
Chp 5: The Behaviour of Interest Rates
Next Week MWF:
I
Chp 5: The Behaviour of Interest Rates
Problem Set on MyLab due Thursday, 8 Oct. at 11pm.
UBC BoC Monetary Policy Competition Team
Vancouv
Announcements
Today:
I
Chp 7: The Stock Market, the Theory of Rational
Expectations & the Efficient Market Hypothesis
Problem Set on MyLab due Saturday, 24 Oct. at 11pm.
Monday Oct 26: Mid-term Exam in class. 33% of course grade
Bring:
I
UBC ID (without t