Includes index.

Contents: The basics: Introducing money, banking and financial matters -- The role of money in the macroeconomy -- Financial instruments, markets and institutions -- Financial instruments and markets: Interest rate measurement and behavior -- The term and risk structure of interest rates -- The structure and performance of securities markets -- The pricing of risky financial assets -- Money and capital markets -- Demystifying derivatives -- Understanding foreign exchange -- Banks and other intermediaries: The nature of financial intermediation -- Depository financial institutions -- Nondepository financial institutions -- Financial system architecture: Understanding financial contracts -- The regulation of markets and institutions -- Financial system design -- The art of central banking: Who's in charge here? -- Bank reserves and the money supply -- The instruments of central banking -- Understanding movements in bank reserves -- Monetary policy strategy -- Monetary theory: The classical foundations -- The Keynesian framework -- The ISLM world -- Money and economic stability in the ISLM world -- An aggregate supply and demand perspective on money and economic stability -- Rational expectations: theory and policy implications -- Empirical evidence on the effectiveness of monetary policy -- Grand finale: Tying it all together --