2025 CFA© Program Curriculum Level I Volume 2 - ECONOMICS

✍ Scribed by CFA Institute

• Publisher: CFA Institute
• Year: 2025
• Tongue: English
• Leaves: 276
• Edition: 2025
• Category: Library

✦ Table of Contents

How to Use the CFA Program Curriculum
CFA Institute Learning Ecosystem (LES)
Designing Your Personal Study Program
Errata
Other Feedback
Economics
Learning Module 1 The Firm and Market Structures
Introduction
Profit Maximization: Production Breakeven, Shutdown and Economies of Scale
Profit-Maximization, Breakeven, and Shutdown Points of Production
Breakeven Analysis and Shutdown Decision
The Shutdown Decision
Economies and Diseconomies of Scale with Short-Run and Long-Run Cost Analysis
Introduction to Market Structures
Analysis of Market Structures
Monopolistic Competition
Demand Analysis in Monopolistically Competitive Markets
Supply Analysis in Monopolistically Competitive Markets
Optimal Price and Output in Monopolistically Competitive Markets
Long-Run Equilibrium in Monopolistic Competition
Oligopoly
Oligopoly and Pricing Strategies
Demand Analysis and Pricing Strategies in Oligopoly Markets
The Cournot Assumption
The Nash Equilibrium
Oligopoly Markets: Optimal Price, Output, and Long-Run Equilibrium
Determining Market Structure
Econometric Approaches
Simpler Measures
Practice Problems
Solutions
Learning Module 2 Understanding Business Cycles
Introduction
Overview of the Business Cycle
Phases of the Business Cycle
Leads and Lags in Business and Consumer Decision Making
Market Conditions and Investor Behavior
Credit Cycles
Applications of Credit Cycles
Consequences for Policy
Economic Indicators over the Business Cycle
The Workforce and Company Costs
Fluctuations in Capital Spending
Fluctuations in Inventory Levels
Economic Indicators
Types of Indicators
Composite Indicators
Leading Indicators
Using Economic Indicators
Other Composite Leading Indicators
Surveys
The Use of Big Data in Economic Indicators
Nowcasting
GDPNow
Practice Problems
Solutions
Learning Module 3 Fiscal Policy
Introduction
Introduction to Monetary and Fiscal Policy
Roles and Objectives of Fiscal Policy
Roles and Objectives of Fiscal Policy
Deficits and the National Debt
Fiscal Policy Tools
The Advantages and Disadvantages of Different Fiscal Policy Tools
Modeling the Impact of Taxes and Government Spending: The Fiscal Multiplier
The Balanced Budget Multiplier
Fiscal Policy Implementation
Deficits and the Fiscal Stance
Difficulties in Executing Fiscal Policy
Practice Problems
Solutions
Learning Module 4 Monetary Policy
Introduction
Role of Central Banks
Roles of Central Banks and Objectives of Monetary Policy
The Objectives of Monetary Policy
Monetary Policy Tools and Monetary Transmission
Open Market Operations
The Central Bank’s Policy Rate
Reserve Requirements
The Transmission Mechanism
Monetary Policy Objectives
Inflation Targeting
Central Bank Independence
Credibility
Transparency
The Bank of Japan
The US Federal Reserve System
Exchange Rate Targeting
Contractionary and Expansionary Monetary Policies and Their Limitations
What’s the Source of the Shock to the Inflation Rate?
Limitations of Monetary Policy
Interaction of Monetary and Fiscal Policy
The Relationship Between Monetary and Fiscal Policy
Practice Problems
Solutions
Learning Module 5 Introduction to Geopolitics
Introduction
National Governments and Political Cooperation
State and Non-State Actors
Features of Political Cooperation
Resource Endowment, Standardization, and Soft Power
The Role of Institutions
Hierarchy of Interests and Costs of Cooperation
Power of the Decision Maker
Political Non-Cooperation
Forces of Globalization
Features of Globalization
Motivations for Globalization
Costs of Globalization and Threats of Rollback
Threats of Rollback of Globalization
International Trade Organizations
Role of the International Monetary Fund
World Bank Group and Developing Countries
World Trade Organization and Global Trade
Assessing Geopolitical Actors and Risk
Archetypes of Country Behavior
The Tools of Geopolitics
The Tools of Geopolitics
Multifaceted Approaches
Geopolitical Risk and Comparative Advantage
Geopolitical Risk and the Investment Process
Types of Geopolitical Risk
Assessing Geopolitical Threats
Impact of Geopolitical Risk
Tracking Risks According to Signposts
Manifestations of Geopolitical Risk
Acting on Geopolitical Risk
Practice Problems
Solutions
Learning Module 6 International Trade
Introduction
Benefits and Costs of Trade
Benefits and Costs of International Trade
Trade Restrictions and Agreements—Tariffs, Quotas, and Export Subsidies
Tariffs
Quotas
Export Subsidies
Trading Blocs and Regional Integration
Types Of Trading Blocs
Regional Integration
Practice Problems
Solutions
Learning Module 7 Capital Flows and the FX Market
Introduction
The Foreign Exchange Market and Exchange Rates
Introduction and the Foreign Exchange Market
Market Participants
Market Composition
Exchange Rate Quotations
Exchange Rate Regimes: Ideals and Historical Perspective
The Ideal Currency Regime
Historical Perspective on Currency Regimes
A Taxonomy of Currency Regimes
Exchange Rates and the Trade Balance: Introduction
Capital Restrictions
Practice Problems
Solutions
Learning Module 8 Exchange Rate Calculations
Introduction
Cross-Rate Calculations
Forward Rate Calculations
Arbitrage Relationships
Forward Discounts and Premiums
Practice Problems
Solutions
Glossary