ECO 473 – Money & Banking
web page: oak.ucc.nau.edu/dlf/
e-mail: dennis.foster@nau.edu
The W.A. Franke College of Business
NORTHERN ARIZONA UNIVERSITY
Spring 2016 – 3 credit hours
Dr. Dennis Foster
523-8178, FCB #308
Office Hours – Monday, 10:00-11:00 am, 4:00-5:00 pm
Wednesday, 10:00-11:00 am, 4:00-5:00 pm,
and by appointment.
Seq. #1526 (sec. #1)
M/W/F 8:00 am – 8:50 am
Room #345 - FCB
ECO 473 – Spring 2016 – Course Syllabus
I. Description: History and functions of money and banking
institutions; financial markets and interest rates; monetary theory and
policy; and international finance. The course provides further depth
and extension of many of the topics included in Principles of
Macroeconomics, including aggregate supply and demand, national
income and output determination, business cycles, monetary policy,
international trade and finance, and the role of money in open and
closed economies. It assumes that a student has already acquired a
familiarity with the basic concepts of these topics.
II. Prerequisites: ECO 285 and Junior Status.
ECO 473 – Spring 2016 – Course Syllabus
III. Course Learning Outcomes: Upon successful completion of the course, students
should be able to:
A. Describe the role of money and financial markets, institutions, and instruments in a
market economy.
B. Explain the interrelationships between money, inflation, and interest rates.
C. Demonstrate how supply and demand analysis in graphical form can be applied to
loanable funds markets.
D. Explain the time value of money and demonstrate an ability to calculate the values of
various financial assets.
E. Explain and evaluate the competing theories underlying the term structure of
interest rates.
F. Describe the function of foreign exchange markets and explain their operation using
supply and demand analysis.
G. Describe the history, modern structure, and policy tools of the Federal Reserve
System.
H. Explain in a historical context the development of our current view of the demand for
money and how it relates to the supply of money.
I. Explain the classical, Keynesian, and monetarist macroeconomic monetary theories.
ECO 473 – Spring 2016 – Course Syllabus
IV. Course Materials: Materials for this course include the following:
Money and Banking available without author attribution on-line from The Saylor Foundation:
http://www.saylor.org/site/textbooks/Money%20and%20Banking.pdf
The Mystery of Banking by Murray Rothbard (Mises Institute, 2nd edition, 2008)
ISBN: 978-1-933550-28-2, or available on-line as a pdf file:
http://mises.org/sites/default/files/Mystery%20of%20Banking_2.pdf
The Forgotten Depression by James Grant; (Simon & Schuster, 2014)
The Forgotten Man by Amity Shlaes; (Harper Collins, 2007)
Meltdown by Thomas E. Woods, Jr.
ISBN: 1-4516-8645-6
ISBN-10: 0-06-621170-0
(Regnery, 2009) ISBN-10: 1596985879
ECO 473 – Spring 2016 – Course Syllabus
V. Teaching Methods: Primary teaching methods for this course
include class lecture, class discussion and assignments. Also, the use
of current technologies will be expected of students.
Learning Process: Each student must take personal
responsibility for learning the material presented in this course.
Successful students have two common traits that I have observed--a
100% commitment to the class and active study habits. Read and
review the assigned material before the lecture. Feel free to consult
with me any time regarding your progress in class.
ECO 473 – Spring 2016 – Course Syllabus
VI. Evaluation Tools: Evaluation inputs will include the use written
homework, quizzes and multiple exams. The majority of your letter grade will
be the result of test scores. Your final letter grade will be based on your
performance as follows:




3 midterm exams @ 100 pts.
= 300
10 of 11 homework assign. @ 25 pts.
= 250
Final exam
= 200
Total points possible
= 750
Grading procedure – I will assume that your performance will follow a standard curve:
A: > 90%
B: 80% - 89.9%
C: 70% - 79.9%
D: 60% - 69.9% F: < 59.9%
This curve reflects my general expectations of student performance based on
the nature and difficulty of the course and the assignments. Should student
performance vary significantly from what I expect, I reserve the right to curve
individual exams and/or the final point total. Also, your final grade cannot be
lower than the average of your four exams.
ECO 473 – Spring 2016 – Course Syllabus
Make-up Assignment/Exam Policy – A make-up midterm exam will
only be given for a serious and documentable excuse, as determined
by me. If granted, it will consist of an alternate all essay exam. If you
will miss an exam due to an “institutional excuse,” I must be informed
ahead of time so that appropriate arrangements can be made.
Missed classes – It is your responsibility to keep up with material in
the class. Only if you miss a class as a result of an “Institutional
Excuse” will you be given an opportunity to make up any points missed
for that class. If you miss a class for any other reason, a zero will be
recorded for this missed work.
Late Work Penalty – All homework assignments are due in person at
the beginning of the class period. See details below. If you are late to
class with an assignment, a penalty will be assessed. No assignments
will be accepted after the class period in which they are due.
ECO 473 – Spring 2016 – Course Syllabus
Academic Integrity Policy – Unless otherwise noted, the work you do must be your
own work. If not, a grade of zero will be given for the assignment/exam. Repeated
offenses will result in expulsion from the class. Acts of academic dishonesty include,
but are not limited to, plagiarism, using unauthorized crib notes and copying test/quiz
answers from other students. Details on NAU’s policy in this regard can be found
here:
https://policy.nau.edu/policy/policy.aspx?num=100601
Other policies can be found in the appendices at the end of this syllabus.
Student Conduct Policy – The W.A. Franke College of Business has a student code of
conduct that you should be familiar with. It is printed below. Breaches of this code of
conduct may result in zero credit for the class period (including homework
assignments), at my discretion. Behaviors I find especially egregious are coming into
the classroom late, leaving the classroom early, getting up during class and leaving for
a short period of time, and inattentiveness.
ECO 473 – Spring 2016 – Course Syllabus
Miscellaneous: Food and beverages are not allowed in the
classrooms. Computer laptops, tablets and cell phones must be kept
out of sight and turned off unless you have some special circumstance
that I need to be aware of. NAU supports and promotes a drug free
environment.
E-mail me: If you have questions/problems you want to ask about,
you may see me during my office hours or schedule an appointment to
see me. If you would like, you can also e-mail me with questions that
you have. If you do this, please fill in the subject category as follows:
mail-ECO473-01-last name. This will help me to react and respond in a
timely fashion.
ECO 473 – Spring 2016 – Course Syllabus
Midterm Exams - The dates are February 8, February 29 and March
21. Each exam will consist primarily of multiple choice questions, but
may include definitional questions, graphical problems, work problems
and short essays, as the case warrants. The multiple choice portion
will use Scantron sheets so you will need to bring a pencil. For the rest
of the exam you may use a pen, or pencil, and a calculator. You may
not share calculators. You may bring in one page of notes, 8.5 x 11
inch, one side only. You will be required to turn this in with your exam.
These exams are worth 100 points each.
Final Exam - The date is noted on the course outline. This exam will
be just be the ‘final midterm’, covering the last portion of the course
and following the same protocol outlined above. It will be longer and
carries twice the weight as a midterm exam.
ECO 473 – Spring 2016 – Course Syllabus
Homework Assignments – Over the course of the semester there will be 11
homework assignments. Each assignment’s due date is shown on the course outline –
H1, H2, H3, et al. These will generally consist of three parts:
1. Answers to take-home quiz (posted on-line) over the assigned readings. [10 pts.]
2. An essay assignment, with a word count. [5 pts.]
3. An in-class quiz at the beginning of class over the assigned special readings (Grant,
Shlaes & Woods). [10 pts.]
These must be fully typed out and you must be present at the beginning of class
when they are due in order to receive full credit. My intent is to use the beginning of
class to discuss your answers. You are free (and encouraged) to make written notes on
these papers during the discussion time, after which I will pick them up. Note that
this is an individual assignment and the work you turn in must be your own.
To provide some flexibility here, I will drop the lowest homework score. At the end
of the term, you will have a total of 10 assignments counted, each at 25 points, for a
total of 250 possible points.
ECO 473 – Spring 2016 – Course Syllabus
Access to class materials – Homework assignments and the required
reading assignments will be posted up on my Money & Banking web
page, accessed from my home page at this site:
http://oak.ucc.nau.edu/dlf/default.asp
Extra Credit – There will be many specific opportunities for extra credit
given for in-class quizzes over special videos (which will not be
included in the exams). These are shown on the course syllabus as
“ec.” These will be worth up to 50 points. There may be additional
opportunities for extra credit, and if so it will be announced in class so
that everyone will have the opportunity to participate. I will not offer
any extra credit just to individual students.
Readings:
Course Outline:
ECO 473 – Spring 2016 – Course Syllabus
18-Jan
Week 1
Week 2
Week 3
MLK holiday
20-Jan
Overview & Introduction to Money
22-Jan
Money & Banking Basics I
25-Jan
Money & Banking Basics II
27-Jan
Supply and Demand for Money
29-Jan
Review; bonus quiz - Woods/Grant podcast
1-Feb
Money creation I
3-Feb
Money creation II
5-Feb
Money creation work problems
8-Feb
Week 4
Codes for
shaded in
boxes:
G 1-4
H1
ec
G 5-9
H2
Exam #1
10-Feb Asymmetric Information
12-Feb Banking types
15-Feb The Fed I
Week 5
G 10-16
17-Feb The Fed II
19-Feb Review; bonus quiz - Yellen presentation
22-Feb Interest Rates I
Week 6
H3
ec
G 17-20
H4
24-Feb Interest Rates II
26-Feb Interest rate work problems
29-Feb
Week 7
Week 8
Exam #2
2-Mar
Bank structures
4-Mar
Banking practices
7-Mar
Financial markets & instruments I
9-Mar
Financial markets & instruments II
11-Mar Bonus quiz over Schiff video due via email
Spring Break - March 14-18
S 1-3
H5
ec
yellow
indicates class
period is for
review/work
problems; no
new material
will be
discussed;
green boxes
indicate 10
point bonus
quiz over
additional
video
assignments;
tan boxes
indicate 5 point
bonus quiz
over additional
video
assignments;
red box
indicates no
class meeting
(watching the
Schiff video is
an alternative
assignment to
class).
ECO 473 – Spring 2016 – Course Syllabus
Spring Break - March 14-18
21-Mar Financial regulation
Week 9
S 4-6
23-Mar Financial regulation - Case Study
25-Mar Review; bonus quiz - Forbes/Grant
28-Mar
Week 10
Week 11
Week 12
Week 13
Week 14
Week 15
H6
ec
Exam #3
30-Mar Central bank history
1-Apr
Money demand
4-Apr
AS/AD Model I
6-Apr
AS/AD Model II
8-Apr
AS/AD Model work problems/scenarios
11-Apr
Foreign Exchange I
13-Apr
Foreign Exchange II
15-Apr
Foreign Exchange work problems
18-Apr
Depression of 1921; the gold standard
20-Apr
The Great Depression
22-Apr
Review; bonus quiz over Selgin video
25-Apr
Austrian Business Cycle Theory I
27-Apr
Austrian Business Cycle Theory II
29-Apr
Review; bonus quiz - Garrison video
2-May
Current Issues
4-May
Current Issues
6-May
Final review
S 7-9
H7
S 10-15
H8
W 1-3
H9
ec
W 4-5
H10
ec
W 6-7
Final Exam (Sec. 1): Monday, May 9; 7:30 am - 9:30 am
H11
Codes for
shaded in
boxes:
yellow
indicates class
period is for
review/work
problems; no
new material
will be
discussed;
green boxes
indicate 10
point bonus
quiz over
additional
video
assignments;
tan boxes
indicate 5 point
bonus quiz
over additional
video
assignments;
red box
indicates no
class meeting
(watching the
Schiff video is
an alternative
assignment to
class).
ECO 473 – Money & Banking
web page: oak.ucc.nau.edu/dlf/
e-mail: dennis.foster@nau.edu
The W.A. Franke College of Business
NORTHERN ARIZONA UNIVERSITY
Spring 2016 – 3 credit hours
Dr. Dennis Foster
523-8178, FCB #308
Office Hours – Monday, 10:00-11:00 am, 4:00-5:00 pm
Wednesday, 10:00-11:00 am, 4:00-5:00 pm,
and by appointment.
Seq. #1526 (sec. #1)
M/W/F 8:00 am – 8:50 am
Room #345 - FCB