The financial sector is the part of the economy made up of institutions that bring together lenders and borrowers. This includes institutions like banks.
Bond prices and interest rates have an inverse relationship. People prefer higher interest rates because they are given a greater rate of return. Most bonds pay a fixed rate of interest so as interest rates fall, they become more desirable which will push their price up. The opposite is true if interest rates are on a rise. Consumers are less interested in the fixed-rate interest rates that come with a bond, so they demand less of them, decreasing the price of the bonds.
💸 Unit 1: Basic Economic Concepts
1.2Opportunity Cost and the Production Possibilities Curve (PPC)
1.3Comparative Advantage and Trade
📈 Unit 2: Economic Indicators and the Business Cycle
2.1Circular Flow and GDP
2.6Real vs Nominal GDP
💲 Unit 3: National Income and Price Determination
3.5Equilibrium in Aggregate Demand-Aggregate Supply (AD-AS) Model
💰 Unit 4: Financial Sector
4.3Definition, Measurement, and Functions of Money
4.4Banking and the Expansion of the Money Supply
⚖️ Unit 5: Long-Run Consequences of Stabilization Policies
5.1Fiscal and Monetary Policy Actions in the Short-Run
5.3Money Growth and Inflation
5.4Deficits and the National Debt
🏗 Unit 6: Open Economy-International Trade and Finance
6.1Balance of Payments Accounts
6.4Effect of Changes in Policies & Economic Conditions on the Foreign Exchange Market
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