Learning Outcome Statements

1. What is Money?

a. compare monetary and fiscal policy;

b. describe functions and definitions of money;

c. explain the money creation process;

2. The Demand for and Supply of Money

d. describe theories of the demand for and supply of money;

e. describe the Fisher effect;

3. The Roles of Central Banks

f. describe roles and objectives of central banks;

4. The Objectives of Monetary Policy

g. contrast the costs of expected and unexpected inflation;

h. describe tools used to implement monetary policy;

i. describe the monetary transmission mechanism;

k. explain the relationships between monetary policy and economic growth, inflation, interest, and exchange rates;

5. Monetary Targeting Rules

j. describe qualities of effective central banks;

l. contrast the use of inflation, interest rate, and exchange rate targeting by central banks;

6. Contractionary and Expansionary Monetary Policies and the Neutral Rate

m. determine whether a monetary policy is expansionary or contractionary;

n. describe limitations of monetary policy;

7. Fiscal Policy: Roles, Objectives, and Tools

o. describe roles and objectives of fiscal policy;

p. describe tools of fiscal policy, including their advantages and disadvantages;

q. describe the arguments about whether the size of a national debt relative to GDP matters;

8. Active and Discretionary Fiscal Policy

r. explain the implementation of fiscal policy and difficulties of implementation;

s. determine whether a fiscal policy is expansionary or contractionary;

9. Interrelationships between Fiscal and Monetary Policy

t. explain the interaction of monetary and fiscal policy.