session 5: The financial sector and the economy

HEC Montréal

Description

Explain why the financial sector is central to almost all macroeconomic debates.
Explain what money is .
Enumerate the three functions of money.
State the alternative measures of money and their primary components.
Explain how banks create money.
Calculate both the simple and the approximate real-world money multiplier.
Explain how a financial panic can occur and the potential problem with government guarantees to prevent such panics.