What effect might a rise in stock prices have on consumers’decisions to spend?2. Banks and other financial institutions channel fundsfrom people who might not put them to productive useto people who...

What effect might a rise in stock prices have on consumers’decisions to spend?2. Banks and other financial institutions channel fundsfrom people who might not put them to productive useto people who can do so and thus play a crucial role inimproving the efficiency of the economy.3. Money appears to be a major influence on inflation,business cycles, and interest rates. Because theseeconomic variables are so important to the health of theeconomy, we need to understand how monetary policyis and should be conducted. We also need to studygovernment fiscal policy because it can be an influentialfactor in the conduct of monetary policy.4. This textbook stresses the economic way of thinking bydeveloping a unifying analytic framework for the studyof money, banking, and financial markets using afew basic economic principles. This textbook alsoemphasizes the interaction of theoretical analysis andempirical data.QUIZ