Economics

Economics in short lessons: how firms price in different market structures, business cycles, fiscal and monetary policy, geopolitics, trade, and exchange rates with the calculations the exam asks for, each with worked examples, charts and exam traps.

How this topic is tested, its exam weight and study tips: Economics exam guide.

1. 01

   The Firm and Market Structures

   9 lessons · ~113 min4 videos 45 cards

   How a firm picks its profit-maximizing output, where it breaks even or should shut down, how economies and diseconomies of scale shape long-run costs, how the four market structures differ, how prices and output are set under monopolistic competition and oligopoly, and how concentration measures are used (and misused) to identify market structure.

   • Revenue, economic profit and the MR = MC ruleVideo · 6 min12 min
   • Breakeven, shutdown and exit decisionsVideo · 5 min13 min
   • Short-run and long-run costs: economies and diseconomies of scale12 min
   • The four market structures and what defines them11 min
   • Monopolistic competition: price, output and the long run12 min
   • Oligopoly: kinked demand, Cournot, Stackelberg and price leadershipVideo · 6 min14 min
   • Oligopoly strategy: Nash equilibrium, collusion and the long runVideo · 6 min13 min
   • Identifying market structure: elasticity, concentration ratios and HHI11 min
   • Integrated cases: reading a market from the data15 min
2. 02

   Understanding Business Cycles

   7 lessons · ~97 min2 videos 41 cards

   How economies swing around their long-run path: the three ways of defining a cycle, the four phases and what households, firms, prices and markets do in each, how credit cycles amplify booms and busts, how labour, capital spending, inventories, consumers and housing move over the cycle, and how leading, coincident and lagging indicators, surveys, nowcasts and diffusion indexes help analysts locate the economy in the cycle.

   • What a business cycle is: classical, growth and growth rate cycles13 min
   • The four phases, recessions and market behaviourVideo · 6 min15 min
   • Credit cycles11 min
   • Labour, capital spending, inventories, consumers and housing15 min
   • Leading, coincident and lagging indicatorsVideo · 6 min15 min
   • Surveys, big data, nowcasting and diffusion indexes13 min
   • Integrated cases: reading the cycle from a data panel15 min
3. 03

   Fiscal Policy

   6 lessons · ~85 min1 video 43 cards

   How governments use spending and taxes to steer the economy: how fiscal policy differs from monetary policy, what it is for, whether a large national debt matters, the tools available and their pros and cons, the fiscal multiplier, and why judging and executing fiscal policy is harder than it looks.

   • Monetary versus fiscal policy and the roles of fiscal policy14 min
   • Deficits, national debt and whether debt matters14 min
   • Fiscal policy tools and what makes a good tax14 min
   • The fiscal multiplier, balanced budgets and Ricardian equivalenceVideo · 6 min14 min
   • Fiscal stance and the difficulties of implementation14 min
   • Integrated cases: costing a fiscal package15 min
4. 04

   Monetary Policy

   8 lessons · ~105 min2 videos 45 cards

   What central banks do and why price stability is their overarching goal, the three tools they use (open market operations, the policy rate and reserve requirements), how a rate change travels through the economy, what makes a central bank effective, how inflation targeting and exchange rate targeting compare, when policy is expansionary or contractionary, where monetary policy runs out of power, and how it interacts with fiscal policy.

   • What central banks do and what they aim for12 min
   • The three tools: open market operations, policy rate, reserve requirements14 min
   • How a rate change reaches growth, inflation and the currencyVideo · 5 min13 min
   • Effective central banks and inflation targeting14 min
   • Exchange rate targeting and policy in developing economies12 min
   • Expansionary or contractionary? The neutral rate and the source of shocks12 min
   • Limits of monetary policy: weak transmission, deflation and quantitative easingVideo · 6 min15 min
   • How monetary and fiscal policy interact13 min
5. 05

   Introduction to Geopolitics

   9 lessons · ~122 min1 video 44 cards

   How geography and politics shape relations between countries, and why investors care: political cooperation versus competition, globalization and its costs, the IMF, World Bank and WTO, the four archetypes of country behaviour, the national security, economic and financial tools of geopolitics, and how to classify, assess and act on geopolitical risk in a portfolio.

   • Geopolitics, actors and political cooperation12 min
   • Resources, standards, soft power, institutions and the hierarchy of interests14 min
   • Globalization: features, motivations, costs and rollback15 min
   • The IMF, the World Bank and the WTO13 min
   • Geopolitical risk and the four archetypes of country behaviourVideo · 6 min13 min
   • The tools of geopolitics13 min
   • Types of geopolitical risk and how to assess them13 min
   • Scenario analysis, signposts and acting on geopolitical risk14 min
   • Integrated cases: reading a geopolitical brief15 min
6. 06

   International Trade

   6 lessons · ~77 min2 videos 42 cards

   Why countries trade and who wins or loses when they do; how tariffs, import quotas, voluntary export restraints and export subsidies change prices, surpluses and national welfare; and why countries form free trade areas, customs unions, common markets and economic unions, including trade creation, trade diversion and what deeper integration means for investors.

   • Why countries trade: the benefits13 min
   • Costs of trade: winners, losers and adjustment11 min
   • Trade restrictions and tariffsVideo · 6 min15 min
   • Quotas, VERs and export subsidies14 min
   • Trading blocs: from free trade areas to economic unionsVideo · 6 min11 min
   • Trade creation, trade diversion and the costs of integration13 min
7. 07

   Capital Flows and the FX Market

   9 lessons · ~115 min1 video 43 cards

   How the foreign exchange market works and who trades in it, how exchange rates are quoted, how to compute and read percentage changes, the difference between nominal and real exchange rates, the menu of exchange rate regimes from dollarization to free floating, why trade balances and capital flows mirror each other, and why governments sometimes restrict capital flows.

   • The FX market: functions and participants13 min
   • Reading exchange rate quotes13 min
   • Percentage changes in exchange rates11 min
   • Nominal and real exchange ratesVideo · 5 min13 min
   • Why no currency regime is ideal12 min
   • The menu of exchange rate regimes15 min
   • Exchange rates, the trade balance and capital flows11 min
   • Capital restrictions12 min
   • Integrated cases: reading an FX and capital-flow brief15 min
8. 08

   Exchange Rate Calculations

   6 lessons · ~80 min2 videos 35 cards

   How to build a cross-rate from two quotes against a common currency, why cross-rates must agree with their components (triangular arbitrage), how to read currency moves in percentage terms, and how forward rates follow from spot rates, interest rates and maturity through a no-arbitrage relationship, quoted as forward points or percentages.

   • Building a cross-rate from two quotesVideo · 6 min12 min
   • Triangular arbitrage and reading currency moves13 min
   • Forward points, premiums and discounts12 min
   • The no-arbitrage link between spot, forward and interest ratesVideo · 6 min14 min
   • Forward points, maturity and the rate differential13 min
   • Integrated cases: hedging a receivable and comparing dealers16 min