《西方经济学原理》Chap 25 Money, Banking, and Financial markets

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

ECSENOMICS Multiple-Bank Expansion of money 1-188 igure 25-5 Fi SI reserves Bank I Bank 2 S10 bank money Bank 3 etc 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. Multiple-Bank Expansion of Money T-188 Figure 25-5

ECSENOMICS Risk and Return on Major Investments. 1926-1998 T-189 Figure 25-6 Small company stocks Large company stocks Long-term corporate bonds Long-term govt bonds Short-term govt, bond 0 Risk(standard deviation of return) McGraw-Hilllrwin Source: Ibbotson Associates, Stocks, Bonds, Bills, and Inflation: 1999 Yearbook

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Risk and Return on Major Investments, 1926-1998 T-189 Figure 25-6 Source: Ibbotson Associates, Stocks, Bonds, Bills, and Inflation: 1999 Yearbook, Ibbotson Associates Inc., Chicago, IL, 1999

ECSENOMICS The Only Guarantee about Stock S Prices Is That They Will Fluctuate 1-190 Figure 25-7 3-1000 " Real s&p s 2100 SP500 14 08 1920 1930 1960 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 Only Guarantee about Stock Prices Is That They Will Fluctuate T-190 Figure 25-7