Macroeconomics › Section D · Labor and financial markets › Topic D.2
Financial markets: bonds, shares, and interest rates
Every loan, bond and share links someone with spare money today to someone who can put it to use. The same demand and supply model you met for goods explains the price of that money, the interest rate, and why bond prices fall when rates rise.
In this topic
- What financial markets do
- Who supplies and who demands
- Worked example: a car-loan market
- Decisions across time, and what shifts the curves
- Worked example: the United States as a borrower
- Usury laws: a ceiling on interest
- Bonds and why their prices move
- Worked example: pricing a bond
- Shares, risk, and diversification
- Other markets and institutions
- Common mistakes to avoid
- Key takeaways
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