Economics Chapter 01 Homework Financial Regulation Banking Industry Structure And Competition

PART ONE

How to Use the

Instructor’s Manual

and Other Textbook

Ancillaries

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 2

Organization of the Instructor’s Manual

To help instructors cope with the increased demands for good teaching in recent years, The

Economics of Money, Banking, and Financial Markets, Twelfth Edition, includes the most

comprehensive package of supplementary materials of any money, banking, and financial

markets textbook. As part of these supplemental materials, I have designed the Instructor’s

Manual to help save you time in preparing class materials, such as class outlines, solutions to

homework problems, lecture notes, and overhead transparencies.

This Instructor’s Manual is divided into four parts. Part One discusses how to use the Instructor’s

Manual and the other textbook ancillaries to make your teaching of the money and banking

course both more effective and less time-consuming. Part Two contains an overview of all the

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 3

Alternative Course Outlines

There are many different ways to teach a course on money, banking, and financial markets. For

this reason, the material in The Economics of Money, Banking, and Financial Markets, Twelfth

Edition, has been arranged with flexibility in mind, so that many teaching styles can be

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 4

 Outline for General Money and Banking Course

Core Chapters

Chapter No. Chapter Title

1 Why Study Money, Banking, and Financial Markets?

2 An Overview of the Financial System

3 What Is Money?

4 Understanding Interest Rates

5 The Behavior of Interest Rates

For a one-semester course, cover any five of the following optional chapters:

Chapter No. Chapter Title

6 The Risk and Term Structure of Interest Rates

7 The Stock Market, the Theory of Rational Expectations, and the Efficient Market

Hypothesis

8 An Economic Analysis of Financial Structure

14 The Money Supply Process

17 The Foreign Exchange Market

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 5

 Outline for General Money and Banking Course with an International

Emphasis

Core Chapters

Chapter No. Chapter Title

1 Why Study Money, Banking, and Financial Markets?

2 An Overview of the Financial System

3 What Is Money?

4 Understanding Interest Rates

5 The Behavior of Interest Rates

9 Banking and the Management of Financial Institutions

For a one-semester course, cover any three of the following optional chapters:

Chapter No. Chapter Title

6 The Risk and Term Structure of Interest Rates

7 The Stock Market, the Theory of Rational Expectations, and the Efficient Market

Hypothesis

8 An Economic Analysis of Financial Structure

14 The Money Supply Process

19 Quantity Theory, Inflation, and the Demand for Money

20 The IS Curve

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 6

 Outline for Financial Markets and Institutions Course

Core Chapters

Chapter No. Chapter Title

1 Why Study Money, Banking, and Financial Markets?

2 An Overview of the Financial System

3 What Is Money?

4 Understanding Interest Rates

5 The Behavior of Interest Rates

6 The Risk and Term Structure of Interest Rates

For a one-semester course, cover any seven of the following optional chapters:

Chapter No. Chapter Title

13 Central Banks and the Federal Reserve System

14 The Money Supply Process

15 Tools of Monetary Policy

16 The Conduct of Monetary Policy: Strategy and Tactics

17 The Foreign Exchange Market

18 The International Financial System

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 7

 Outline for Monetary Theory and Policy Course

Core Chapters

Chapter No. Chapter Title

1 Why Study Money, Banking, and Financial Markets?

2 An Overview of the Financial System

3 What Is Money?

22. Aggregate Demand and Supply Analysis

23 Monetary Policy Theory

24 The Role of Expectations in Monetary Policy

For a one-semester course, cover any four of the following optional chapters:

Chapter No. Chapter Title

25 Transmission Mechanisms of Monetary Policy

A one-quarter course would probably only include one or two of the optional chapters.

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 8

Overviews of the Textbook Chapters

and Teaching Tips

I have been teaching money and banking now for over thirty years. The overviews and teaching

tips in Part Two of the Instructor’s Manual are intended to share with you some of my

experiences in the classroom with teaching the material in the textbook. The overview and

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 9

Answers to End-of-Chapter Problems

Part Three of the Instructor’s Manual contains the answers to end-of-chapter problems. Some of

these questions require students to look up current data, and in these cases no answers are given;

however, for the rest of the questions, the answers are quite complete.

Many instructors will use the end-of-chapter questions for homework assignments, as I do. I

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 10

PowerPoint Presentation

Also offered in the instructor’s supplement package is a PowerPoint Presentation that contains

lecture notes and all the textbook’s figures and tables. These slides are comprehensive and outline

all the major points covered in the text. The lecture notes have been class-tested successfully—they

are the ones that I use in class—and they should help other instructors prepare their lectures as they

have helped me.

A special feature of these PowerPoints is that all the analytic figures are completely manipulable

by the user so that instructors can custom-design their PowerPoint lectures. In addition, these

PowerPoint have step-by-step animations that can be used to spice up lectures.

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 11

Test Bank

The Test Bank contains over 2,600 multiple-choice questions that are appropriate for use

as quiz or test questions. It is provided as a set of Word files in Macintosh and Windows

versions, as well as a set of .BOK Testgen files. It can be downloaded from the Instructor’s

Resource Center at www.pearsonhighered.com/irc. These forms provide alternative methods for

the instructor to make up exams.

Program features:

 The Test Bank can include four types of questions: multiple choice, true/false, short answer,

and essay.

 A supplementary page attached to each Test Bank question can contain its topic, objective,

skill, difficulty, and other user-added information.

 Test questions can be chosen in a variety of ways including manual selection, random

selection, choose while viewing, and choose by searching.

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 12

Course Management with MyEconLab

MyEconLab delivers rich online content and innovative learning tools to your classroom.

Instructors who use MyEconLab gain access to powerful communication and assessment tools,

and their students receive access to the additional learning resources described below.

Students and MyEconLab

MyEconLab delivers the content and tools your students need to succeed online. Students whose

instructors use MyEconLab gain access to a variety of study and practice tools that put them in

control of their own learning:

designed to help the student exactly when he or she needs support.

 News articles are available for classroom and assignment use. Up-to-date news articles

and complimentary discussion questions are posted weekly to bring today’s news into the

classroom and course.

 Real-Time Data Analysis Problems allow instructors to assign problems that use up-to-

the-minute data. Each RTDA exercise loads the appropriate and most current data from

FRED, a comprehensive and up-to-date data set maintained by the Federal Reserve Bank

of St. Louis. Exercises are graded based on the particular data used, and feedback is

provided.

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 13

Instructors and MyEconLab

With MyEconLab instructors can customize existing content and add their own. They can

manage, create, and assign tests to students, choosing from the exercises in the Study Plan as