Lecture Money and capital markets: Chapter 1 – Peter S. Rose, Milton H.Marquis - TRƯỜNG CÁN BỘ QUẢN LÝ GIÁO DỤC THÀNH PHỐ HỒ CHÍ MINH

<span class='text_page_counter'>(1)</span><div class='page_container' data-page=1></div>
<span class='text_page_counter'>(2)</span><div class='page_container' data-page=2>

Chapter 1

Functions and Roles of the 

Financial System in the 

Global Economy

</div>
<span class='text_page_counter'>(3)</span><div class='page_container' data-page=3>

1 ­ 3

<i>McGraw­Hill/Irwin</i>

<i>Money and Capital Markets, 9/e</i> <i>â2006TheMcGrawưHillCompanies,Inc.,AllRightsReserved.</i>

LearningObjectives

ã _{Tounderstandthefunctionsperformedandtherolesplayedby}

thesystemoffinancialmarketsandfinancialinstitutionsinthe
globaleconomyandinourdailylives.

ã Todiscoverhowimportantthefinancialsystemisto

</div>
<span class='text_page_counter'>(4)</span><div class='page_container' data-page=4>

<i>McGrawưHill/Irwin</i>

<i>MoneyandCapitalMarkets,9/e</i> <i>â2006TheMcGrawưHillCompanies,Inc.,AllRightsReserved.</i>

The<i>financialsystem</i>is

ã _{thecollectionofmarkets,institutions,laws,regulations,and}

techniques

ã _{throughwhichbonds,stocks,andothersecuritiesaretraded,}

</div>
<span class='text_page_counter'>(5)</span><div class='page_container' data-page=5>

1ư5

<i>McGrawưHill/Irwin</i>

<i>MoneyandCapitalMarkets,9/e</i> <i>â2006TheMcGrawưHillCompanies,Inc.,AllRightsReserved.</i>

IntroductiontotheFinancialSystem

Theprimarytaskofthefinancialsystemis

ã _{tomovescarceloanablefunds}
ã _{fromthosewhosave}

ã _{tothosewhoborrowtobuygoodsandservicesandtomake}

investmentsinnewequipmentandfacilities,

ã _{sothattheglobaleconomycangrowandthestandardofliving}

</div>
<span class='text_page_counter'>(6)</span><div class='page_container' data-page=6>

<i>McGrawưHill/Irwin</i>

<i>MoneyandCapitalMarkets,9/e</i> <i>â2006TheMcGrawưHillCompanies,Inc.,AllRightsReserved.</i>

ã _{Thebasicfunctionofthe}<i>_{economicsystem}</i>_{istoallocatescarce}

resourcesland,labor,managementskill,andcapitalto
producethegoodsandservicesneededbysociety.

ã Theglobaleconomygeneratesaflowofproductioninreturn
foraflowofpayments.

ã _{Thecircularflowofproductionandincomeisinterdependent}

</div>
<span class='text_page_counter'>(7)</span><div class='page_container' data-page=7>

1ư7

<i>McGrawưHill/Irwin</i>

<i>MoneyandCapitalMarkets,9/e</i> <i>â2006TheMcGrawưHillCompanies,Inc.,AllRightsReserved.</i>

CircularFlowofIncome,Payments,andProduction

intheGlobalEconomicSystem

Producingunits
(mainlybusinessfirms

</div>
<span class='text_page_counter'>(8)</span><div class='page_container' data-page=8>

<i>McGrawưHill/Irwin</i>

<i>MoneyandCapitalMarkets,9/e</i> <i>â2006TheMcGrawưHillCompanies,Inc.,AllRightsReserved.</i>

ã _{Mosteconomiesaroundtheworldrelyprincipallyupon}
<i>markets</i>tocarryoutthecomplextaskofallocatingscarce
resources.

ã Themarketplaceis<i>dynamic</i>.Itdetermineswhatgoodsand
serviceswillbeproducedandinwhatquantitiesthroughtheir

<i>prices</i>.

ã _{Marketsalsodistribute}<i>_income</i>_{byrewardingsuperior}

</div>
<span class='text_page_counter'>(9)</span><div class='page_container' data-page=9>

1ư9

<i>McGrawưHill/Irwin</i>

<i>MoneyandCapitalMarkets,9/e</i> <i>â2006TheMcGrawưHillCompanies,Inc.,AllRightsReserved.</i>

TypesofMarkets

ã _{Thereareessentiallythreetypesofmarketswithintheglobal}

economicsystem.

The <i>factor markets</i> allocate factors of production (land, labor, 

skills, capital) and distribute  income (wages, rent) to the 
owners of productive resources.

 Consuming units use most of their income from factor markets 

</div>
<span class='text_page_counter'>(10)</span><div class='page_container' data-page=10>

<i>McGraw­Hill/Irwin</i>

<i>Money and Capital Markets, 9/e</i> <i>© 2006  The McGraw­Hill Companies, Inc., All Rights Reserved.</i>

 The <i>financial markets</i> channel savings to those individuals and 

</div>

<!--links-->