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Money & Banking, ECON 3313

Spring 2002


Instructor: Kenneth R. Szulczyk
Office Number: Hanner 101
Office Telephone: 744-4506
Office Hours: To be arranged.
Money and Banking blends together a wide spectrum of ideas. This course has a little finance, supply and demand analysis from microeconomics, history of the U.S. financial system, and a touch of accounting. This course brings together all these concepts and explains the key role of a very powerful financial institution called the central bank. Every country in the world has a central bank. In the United States, the central bank is known as the Federal Reserve System, while in Japan, England, and Germany this institution is called the Bank of Japan, Bank of England, and Bundesbank, respectively. The central bank influences its own country's money supply, inflation rate, interest rates, and foreign-exchange rates. The central bank has a significant impact on the economic well-being of society. Even though the United State financial system is discussed, the same principles and concepts can be applied to any financial system in the world. This course explains the financial world around you and how the Federal Reserve System tries to keep the U.S. economy financially healthy.
Required Textbook
Money, the Financial System, and the Economy, by R. Glenn Hubbard (2001), Addison-Wesley Publishing Company, 4rd edition.
Grades
Three examinations will be given in this course.  Each examination is worth 100 points and it will consist of 30 multiple choice questions (approximately 5 questions will be taken out of each chapter) and four short-answer essay/graphical analysis questions each worth 10 points.  The last examination will not be comprehensive.  The exams are rigorous and I will double your best exam score.  You are required to take the final exam (3rd exam)Any make-up exams will consist of 10 essay questions and no multiple choice.  No exceptions will be allowed!

Quizzes will be given throughout this course and will total 50 points.  A course paper is also required and it is also worth 50 points.  The course paper is due during dead week.  I will give you the details later.  Please do not miss any quizzes; no makeups will be allowed!  I will announce whether you may use your notes or textbook for quizzes. However, no material can be used for the exam!  I will provide some sample questions on the internet on my personal website.

Grade breakdown: Quizzes: 50 points
Course Paper: 50 points
1st Exam 100 points
2nd Exam 100 points
3rd Exam 100 points
Best Test Score 100 points
Total 500 points
Grading Scale 450 to 500 points is an A,
400 to < 450 points is a B,
350 to < 400 points is a C,
300 to < 350 points is a D,
and below 300 points is a F.
Academic Dishonesty/Cheating
If anyone is caught cheating, his grade will be an automatic "F." I will impose the following penalties for anyone caught talking during the quizzes or exams: The first offense, I will warn you. The second offense, I will decrease your quiz or exam by 20%. The third offense results in a zero for that particular quiz or exam.
Course Schedule
This schedule is tentative and may be changed.

Chapter 1: Introducing Money and the Financial System
Chapter 2: Money and the Payments System
Chapter 3: Overview of the Financial System
Chapter 4: Interest Rates and Rates of Return
Chapter 6: Determining Market Interest Rates
Chapter 7: Risk Structure and Term Structure of Interest Rates

Examination I (Approximately 5th week)

Chapter 9: Derivative Securities and Derivative Markets
Chapter 12: What Financial Institutions Do
Chapter 13: The Business of Banking
Chapter 14: The Banking Industry
Chapter 16: Banking in the International Economy
Chapter 17: The Money Supply Process

Examination II (Approximately 9th week)

Chapter 18: Changes in the Monetary Base
Chapter 19: Organization of Central Banks
Chapter 20: Monetary Policy Tools
Chapter 21: The Conduct of Monetary Policy
Chapter 22: The International Financial System and Monetary Policy

Examination III (During final exam week)

 

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