The Financial System and Monetary Policy

Calculate the price of a bond given its face value, coupon rate, maturity, and market interest rate.

Model the money market and calculate the equilibrium interest rate from money supply and demand equations.

Calculate the simple money multiplier and the total change in money supply from an initial deposit.

Apply the quantity theory of money (MV = PQ) to calculate the effects of changes in money supply on the price level.

Calculate the impact of various monetary policy tools (open market operations, reserve requirements, policy rate) on the money supply and equilibrium interest rate.