Study Notes from Dr. Aroskar's Fall 2025 Class

Course Information

  • Instructor: Dr. Aroskar
  • Semester: Fall 2025

Directions for Students

  1. Prepare your materials

    • Ensure all necessary materials are ready before starting.

  2. Mark your answers clearly

    • Clearly indicate your answers on the provided answer sheet.

  3. Cheating policy

    • Cheating will result in serious consequences.

  4. Allowed materials

    • You can use specified resources during the examination.

  5. Choosing questions

    • Choose the questions wisely based on your strengths.

  6. Answer all four questions

    • Make sure to complete all four questions provided.

  7. Good luck

    • Wishing students success on the examination!

Economic Concepts Overview

Financial Instruments and Currency

  • Both securities and loans are crucial elements in financial markets.
  • Securities refer to tradable financial assets such as stocks and bonds.
  • Loans represent borrowed funds that must be repaid with interest.
  • Currency in circulation: Refers to the physical money (coins, notes) that is actively being used in the economy.
  • Reserves: Holdings that financial institutions keep to maintain liquidity and meet customer withdrawals.

Economic Theories

Classical and Neoclassical Economics
  • Price Flexibility:
    • In classical economics, prices are considered to be flexible, meaning they can adjust freely to changes in supply and demand.
  • Sticky Prices:
    • In neoclassical economics, prices may be 'sticky,' meaning they do not adjust quickly in response to changes in economic conditions.

Important Definitions

  • Securities: Financial instruments that have monetary value and can be traded.
  • Loans: Contracts in which one party lends money to another, who agrees to pay back the principal amount plus interest.
  • Currency in circulation: The physical money that is in active use within an economy.
  • Reserves: Funds that financial institutions hold to ensure they can meet their obligations.

Summary

This document highlights the initial directions for students in a course led by Dr. Aroskar during Fall 2025, providing an overview of fundamental concepts related to economic instruments such as securities and loans, as well as distinguishing between classical and neoclassical economic perspectives regarding price mechanisms.