ECSENOMICS Chapter 25 Money, Banking, and Financial markets McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 25 Money, Banking, and Financial Markets
ECSENOMICS We Now Turn to Money: Its Demand s and the Role of Banks in Its Supply T-184 Figure 25-1 ASand AD McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. T-184 Figure 25-1 We Now Turn to Money: Its Demand and the Role of Banks in Its Supply
ECSENOMICS So Most Interest Rates Move Together 1-185 Figure 25-2 3-month Treasury bonds 20-year Treasury bonds Baa Corporate bonds 2 10 1955 1965 1985 1990 Yea McGraw-Hilllrwin Source: Federal Reserve System
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Most Interest Rates Move Together T-185 Figure 25-2 Source: Federal Reserve System
ECSENOMICS Real vs Nominal Interest Rates T-186 Figure 25-3 Real interest rate(on protected security Nominal interest Real interest rate (calculated) 1955196019651970197519801985199019952000 McGraw-Hilllrwin Source: Federal Reserve Board, U.S. Department of Labor
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Real vs. Nominal Interest Rates T-186 Figure 25-3 Source: Federal Reserve Board, U.S. Department of Labor
ECSENOMICS The Transactions Demand for Money 1-187 Figure 25-4 3,000 1,500 0 aY Day Day 0 15 30 Day of month McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. The Transactions Demand for Money T-187 Figure 25-4