The Checklist

FROM TUESDAY

• Read ST 4
• Financial Intermediaries
  • Banks (“Commercial Banks”)
  • Mutual Funds
  • Bonds
    • Price vs. rate of return
    • Name of borrower, date of maturity and value of maturity
    • Default risk
    • Zero coupon bonds vs. coupon bonds
    • Treasury bonds
• Stocks
  • Risk and return
• When does the bridge between borrowing and lending break down?
• Insecure Property Rights*
• Politicized Lending
• Government Banks
• Rate Controls
• Inflation*
• Bank Failures*

FROM THURSDAY

I am told that this is not on the 1st Exam.

• Read Ch. 17
• Comparative Advantage
  • Why trade at an individual level?
  • Countries should produce with the lowest opportunity cost and import the rest
  • Voluntary trade helps both sides
  • Absolute advantage
  • Comparative Advantage
  • Voluntary Trade àboth sides benefit
  • Barriers to trade
    • Natural Trade Barriers
      • Geographic
      • Language
    • Un-natural Trade Barriers
      • Tariff
      • Import Quota