Introduction to Finance

 8. 
(LO 1.3)
Describe what is meant by 
ethical behavior
.
 9. 
(LO 1.4)
What are the four major components of an eff ective 
fi nancial system?
 10. 
(LO 1.4)
Identify and briefl y describe the fi nancial functions in 
the fi nancial system.
 11. 
(LO 1.5)
Briefl y describe the diff erences between money and 
capital markets.
 12. 
(LO 1.5)
What are the diff erences between primary and secondary 
markets?
 13. 
(LO 1.5)
How do debt securities and equity securities diff er?
 14. 
(LO 1.5)
Identify the four types of major fi nancial markets.
 15. 
(LO 1.6)
Indicate some of the career opportunities in fi nance 
available to business graduates today.

---

21
CHAPTER 
2
Money and the 
Monetary System
L E A R N I N G O B J E C T I V E S
After studying this chapter, you should be able to do the following:
LO 2.1 
Discuss the developments that led to the 2007–2008 fi nancial crisis.
LO 2.2 
Describe three ways in which money is transferred from savers to businesses.
LO 2.3 
Identify the major components of the monetary system.
LO 2.4 
Describe the functions of money.
LO 2.5 
Discuss how money developed in the United States.
LO 2.6 
Describe major types of money market securities.
LO 2.7 
Explain the M1 and M2 defi nitions of the money supply.
LO 2.8 
Explain possible relationships between money supply and economic activity.
LO 2.9 
Describe developments in the international monetary system.