DSST Money and Banking study plan

Define money's three functions and compute M1 and M2 from a supplied list of assets

Trace how a single $1,000 deposit expands through the banking system given a 10% reserve ratio, showing each round

Distinguish the equation of exchange (MV = PQ) from the quantity theory and state what each assumes about velocity

Explain the loanable funds model and predict the effect of a rise in the government deficit on the equilibrium interest rate

Derive the money multiplier from the currency ratio and reserve ratio and compute it for three numeric cases

Classify each motive for holding money (transactions, precautionary, speculative) and match it to the variable it responds to

Graph and narrate the short-run and long-run Phillips curve adjustment after an expansionary policy shock

Compare monetarist, Keynesian, and rational-expectations predictions for the same open-market purchase

List the Federal Reserve's stated monetary policy goals and identify which are mandated by statute versus customary

Describe the structure of the FOMC and state who votes and how often membership rotates

Sequence the transmission channels from an FOMC rate decision to bank lending, asset prices, and the exchange rate

Distinguish the tools of conventional policy (open market operations, discount rate, reserve requirements) from the administered rates used in the ample-reserves framework

Compute the price and yield of a discount bond and a coupon bond given stated inputs

Distinguish the spot, forward, futures, and options markets and state the primary use of each

Explain how a financial intermediary reduces transaction costs, adverse selection, and moral hazard, with one concrete example of each

Trace the flow of funds from a saver to a borrower through direct finance and through indirect finance and compare the risks borne at each step

Interpret a bank balance sheet and compute the leverage ratio and return on equity from supplied figures

Identify the major categories of bank risk (credit, liquidity, interest-rate, operational) and match each to a management technique

Summarize the purpose and main requirements of capital adequacy rules and deposit insurance without overstating specifics

Explain how a bank run can occur and how deposit insurance and central bank lending alter depositor incentives

Convert between direct and indirect exchange rate quotations and compute a cross rate from two dollar-based quotes

Distinguish a spot from a forward transaction and explain how a forward contract hedges currency risk

Explain purchasing power parity and interest rate parity and state the conditions under which each holds

Trace how a change in domestic interest rates affects the exchange rate and net exports under a flexible regime

Review the structure and functions of the financial system and identify the roles of depository versus nondepository institutions

Recite the primary regulators' jurisdictions and match each institution type to its supervisor

Re-solve the highest-miss questions from weeks 1 through 6 and write a one-line reason for each corrected answer

Take two full-length timed practice exams under test conditions and score each by domain

Identify the two weakest domains by score and re-teach those concepts from notes within the final week

Memorize the core formulas (money multiplier, equation of exchange, bond pricing, cross rates) and reproduce them from memory

Build a one-page final review sheet limited to the facts most likely to be tested