Ch.4: The Financial Markets 1. Determinants of money demand and derivation the money demand function. 2. Determination of the nominal interest rate, and the LM relation. Functional and graphical description. 3. Money demand, Money supply and equilibrium interest rate. Effects of changes in money supply, and money demand on equilibrium interest rate. 4. Monetary policy and open market operations. What are the tools available to a central bank for monetary policy? 5. Bond prices and bond yields. Relationship between money market and bonds market. 6. Demand and supply of Central Bank money and the determination of interest rate. 7. Definition and explanations.

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