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College of Business Administration

Depart= ment of Economics

Money = and Banking

Lectur= er: O. Mikhail

ECO 3223-0001

Spring= 2005

Course Outline

Time = &nb= sp; : &= nbsp; Monday, Wednesday, 9:00 a.m. – 10:15 a.m.

Location&nb= sp; : &= nbsp; BA I - 220.

Office &n= bsp; : &= nbsp; BA II - 302.

Office Hours : &= nbsp; Monday, Wednesday, Thursday 11:00 a.m. – 12:30 p.m.

&= nbsp; &nbs= p; &= nbsp; OR by scheduled appointment.

Class Web Page: h= ttp://www.bus.ucf.edu/omikhail/Eco3223/W2005/Eco-3223-w2005.htm

E-Mail = ; <= /span>: &= nbsp; omikhail@hotmail.com

= ; &n= bsp; = ; omikhail@bus.ucf.e= du

Phone = &nb= sp; : &= nbsp; 407-823-4258

Fax &n= bsp; = ; : &= nbsp; 407-823-3269

Course Objective

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How do financial markets influence t= he allocation of resources in the economy? Why do they affect the level of economic activity? Does the structure of the financial system matter? Which= one matters the most: the domestic system or the international financial system= and what are the functions and limitations of each? Do financial institutions matter? What kind of [and which] regulations should exist on their behavior – if any? Which monetary policy is ought to be pursued to recover fro= m a recession – if any? How= do monetary policies influence the economy, the business cycle and the economic agent well-being? What are the functions and role of money in the economy? In this class, we will attempt to understand the extent, the magnitude and the influence of the financial sec= tor on the economy.

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Regard= less of your occupation, as long as you are involved in the financial market (as an analyst, a venture capitalist, a financial consultant, or a marketing specialist), and as long as your objective is to reach a profit maximizing = and efficient state, your knowledge of the interaction of the macroeconomics and the financial markets will aid, help and [exponentially] improve your forec= asts and decision-making process.

We will study the financial markets and the dramatis personae (the cast of players) – the financial institutions – which participate in it? A clear distinction between the money and = the capital market will be developed. Also, we will study the characteristics, history, powers and objectives of the central bank as a powerful financial institution.

Briefly, we will study an= d focus on the following:

Overview of the financial system,
Interest rates,
Financial institutions,
The Central Bank (The Fed), and
Monetary policy.

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By the end of the class, = students should be able to understand and explain the nature and functions of money = by comparing the characteristics of a barter economy and a monetary economy. Students should also be able to understand and explain what financial intermediation is and how it improves= the performance of the economy. Furthermore, students are expected to understand and explain the pri= nciples underlying the determination of interest rates, money supply, money demand = and most of all the mechanisms through which monetary policy affects the econom= y.

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Basic knowledge of algebra is required. Students are responsible for all materials covered in class that is presented in the textbook, in the study guide and in the lecture notes.

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Attend= ance at lectures is not mandatory but is recommended. If you are experiencing any difficulty in this class = (or any other), please arrange a meeting with me to discuss it.

E-mail Policy, Lecture Notes and Class Web = Page

The lecture notes are not substitutes for the textboo= k; they are a complement to the textbook.

Office Hours

If my office hours (stated above) conflict = with your schedule and you need to meet with me, please let me know [ASAP] so I = can arrange a mutually acceptable time to meet.

Required Book

Mishkin<= span style=3D'letter-spacing:-.15pt'>, Frederic S. (2004) The Economic= s of Money, Banking, and Financial Markets, 7^th Edition, Pearson, Addison-Wesley. ISBN: 0-321-12235-6.

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Visit = the book web page at www.aw.com/mishkin

Evaluation (Preliminary)

Aplia Assignments (12 assignments) &= nbsp; &nbs= p; 30%

Semester-Team Assignments (2 assignments) &= nbsp; 20%

Quizzes (3 Quizzes) = &nb= sp; = &nb= sp; 20%

Final Exam (Wednesday, April 27, 2005) &= nbsp; 30 %

Note= that the FINAL EXAM will be held from 7:00 a.m. to 9:50 a.m. =

I expect you to uphold the guidelines of the Golden Rules, http://www.ucf.edu/= goldenrule

Only, your best two quizzes and your best 12 assignments will count toward your final grade. No extra-credit assignment = is given. No early or make-up exams will be given. The Final Exam is held on Wednesday, April 27 2005 from 7:00 a.m. to 9:50 a.m.

Finding Monetary Data=

Printed format

Subscribe to the National Economic Trends – The Federal Reserve Bank of St. Lo= uis.

http://research.stlouisfed.org/publications/net/

Data Retrieval – Electronic format

The Federal Reserve Bank of St. Louis Economic Data - FRED II http://research.stlouisfed.o= rg/fred2/

Class Structu= re

The class will be held in an active-discussion framework. = Due to the class size and the limited class time, I suggest that students form study groups outside of class to work through the study guide and end-of-ch= apter problems.

Assignments

A total of 12 assignments will posted at http://econ.aplia.com Assignments are d= ue and graded online. The web course fee is $21.00. To set up your account with = aplia, please do the following:

3D"Aplia

<= span style=3D'font-size:9.0pt;font-family:Verdana;color:black'>The course key is: X7P2-45T3-CHPB

First Time Aplia Users:=

1. Connect to http://econ.aplia.com

2. Complete the Configuration = Test. You must have JavaScript and Flash 6 or later to use the site. If you don't, the configuration test will tell you and instructions will follow. <= o:p>

3. Return to the Sign In page = and click "Register here."

4. You will be prompted to ent= er your e-mail address and select a password.

5. You will then be asked to e= nter your course key (above).

6. You only need to register o= nce. After the registration process is complete, you will not need to enter the course key again.

7. Before entering your course= , you will be prompted for payment. There is a 21 day grace period for this cours= e. If your payment has not been received by 01.31.05, you will not be able to access the site until Aplia receives your payme= nt. Please note that you will need to register for your course at least one hour prior to participating in any experiments.

8. You may have an Aplia Payment Code for this course. You will have the option to use this code (which you may have received bundled with a textboo= k or purchased at the bookstore) when you are prompted for payment. Please remem= ber that once opened, payment codes are not refundable.

Returning Aplia Users:

Connect to http://econ.aplia.com <= /o:p>
Sign in using your usual e-mail address and password.
On your home page click the button "Enroll in a New Course."
You will be asked to enter your course key (above).
Before entering your course, you will be prompted for payment. There is a 21 = day grace period for this course. If your payment has not been received by 01.31.05, you will not be able to access the site until Aplia receives your payment. Please note that yo= u will need to register for your course at least one hour prior to participat= ing in any experiments.
You may have an Aplia Payment Code for this co= urse. You will have the option to use this code (which you may have received bundled with a textbook or purchased at the bookstore) when you are prompted for payment. Please remember that once opened, payment codes = are not refundable.
If you want to switch between courses, use the [Switch Course] link at the top of the screen, or use the "My Account" tab, then click on "My Courses."

If you have questions about registering or using the A= plia website, please contact Aplia by clicking the <= span class=3DSpellE>Aplia Support link at the bottom of any= Aplia page or by e-mailing support@aplia.com. = You will receive a response in one business day.

Reading List

1/10 &= nbsp; Introduction

= ; Why Study Money, Banking, and Financial Markets? &= nbsp; Chapter 1

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1/12 &= nbsp; An Overview of the Financial System = ; &n= bsp; = ; &= nbsp; Chapter 2

&= nbsp; What Is Money? &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; Chapter 3

1/17 &= nbsp; Martin Luther King Jr. Day

1/19= What Is Money? &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; Chapter 3

= ; Assignment 1 is due.

1/24 &= nbsp; Understanding Interest Rates = ; &n= bsp; = ; &n= bsp; Chapter 4

&= nbsp; The Behavior of Interest Rates = ; &n= bsp; = ; &= nbsp; Chapter 5

= ; Assignment 2 is due.

1/26 &= nbsp; The Behavior of Interest Rates = ; &n= bsp; = ; &= nbsp; Chapter 5

1/31 &= nbsp; An Economic Analysis of Financial Structure&nb= sp; = &nb= sp; Chapter 8

= ; Assignment 3 is due.

2/2 &n= bsp; QUIZ I (Chapters: 1-5)

2/7 &n= bsp; Banking and the Management of Banking Institutions&= nbsp; &= nbsp; Chapter 9

= ; Assignment 4 is due.

2/9 &n= bsp; Banking and the Management of Banking Institutions&= nbsp; &= nbsp; Chapter 9

&= nbsp; Banking Industry: Structure and Competition &n= bsp; &= nbsp; &= nbsp; Chapter 10

2/14 &= nbsp; Banking Industry: Structure and Competition &n= bsp; &= nbsp; &= nbsp; Chapter 10

= ; Assignment 5 is due.

2/16 &= nbsp; Economic Analysis of Banking Regulation &= nbsp; &nbs= p; &= nbsp; Chapter 11

2/21 &= nbsp; Economic Analysis of Banking Regulation &= nbsp; &nbs= p; &= nbsp; Chapter 11

= ; Assignment 6 is due.

2/23 &= nbsp; Nonbank Finance = &nb= sp; = &nb= sp; = &nb= sp; Chapter 12

2/28 &= nbsp; Structure of Central Banks and the Federal Reserve System Chapter 14

= ; Assignment 7 is due.

3/2 &n= bsp; QUIZ II (Chapters: 8-12)

3/7 &n= bsp; Structure of Central Banks and the Federal Reserve System Chapter 14

= ; Assignment 8 is due.

3/9 &n= bsp; Multiple Deposit Creation and the Money Supply Process Chapter 15

3/14 &= nbsp; Spring Break

3/16 &= nbsp; Spring Break

3/21 &= nbsp; Determinants of the Money Supply = &nb= sp; = &nb= sp; Chapter 16

= ; Assignment 9 is due.

3/23 &= nbsp; Tools of Monetary Policy &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; Chapter 17

3/28 &= nbsp; Conduct of Monetary Policy: Targets and Goals = &nb= sp; Chapter 18

= ; Assignment 10 is due.

3/30 &= nbsp; The Demand for Money &nb= sp; = &nb= sp; = &nb= sp; Chapter 22

4/4 &n= bsp; QUIZ III (Chapters: 14-18)

= ; Assignment 11 is due.

4/6 &n= bsp; Aggregate Demand and Supply Analysis = ; &n= bsp; = ; Chapter 25

4/11 &= nbsp; Aggregate Demand and Supply Analysis = ; &n= bsp; = ; Chapter 25

= ; Assignment 12 is due.

= ; Team Assignments are due.

4/13 &= nbsp; Transmission Mechanisms of Monetary Policy &n= bsp; &= nbsp; Chapter 26

4/18 = Transmission Mechanisms of Monetary Policy &n= bsp; &= nbsp; Chapter 26

= ; Money and Inflation = &nb= sp; = &nb= sp; = Chapter 27

= ; Assignment 13 is due.

4/20 &= nbsp; Money and Inflation = &nb= sp; = &nb= sp; = Chapter 27

4/25 &= nbsp; Review Session

4/27 &= nbsp; FINAL EXAM

Academic Dates – Spring 2005

Academic Dates and Deadli= nes	<= /p>
Classes Begin<= /span>	January 10
Late Registration and Add= /Drop	January 10-14 =
Withdrawal Deadline<= /o:p>	March 4
Class Schedule and Appoin= tments for Summer 2005/Fall 2005/Spring 2006 Available on M= yUCF	March 7
Registration for Summer 2005/Fall 2005/Spring 2006 begins	March 28
Graduate Thesis/Dissertat= ion Defense Deadline	April 4
Founder's Day Honors Convocation	April 13
Graduate Thesis/Dissertat= ion Submission Deadline	April 25
Classes End; Last Day to = Remove Incomplete	April 25
Final Examination Period<= o:p>	April 26 - May 2
Grades Available on MyUCF (begins at 9 a.m.)	May 7 <= /p>
Commencement	May 5-7

<= o:p>

Spring 2005 Holidays	<= /p>
Martin Luther King Jr. Da= y	January 17
Spring Break	March 14-19
Spring 2005 Special Event= s	<= /p>
Founder's Day Honors Convocation (Classes still held)	April 13

<= /o:p>

THE UCF CREED

Integrity, scholarship, community, creativity, and excellence are the core values
that guide our conduct, performance, and decisions.

Integrity

I will practice and defend academic and perso= nal honesty.

Scholarship

I will cherish and honor learning as a fundam= ental purpose
of my membership in the UCF community.

Community

I will promote an open and supportive campus environment by
respecting the rights and contributions of every individual. <= /p>

Creativity

I will use my talents to enrich the human experience.

Excellence

I will strive toward the highest standards of performance in any endeavor I undertake.

http://pegasus.cc.uc= f.edu/~admissio/creed.htm