Definition (1) MICROECONOMICS

Three themes (2)juuuu

The allocation of scarce

TheThe role
role
resources of prices
of the market

(3) Why making choices (10) How prices important? How prices – determined?
(4) definitions of “trade-off”/ “well- (11) What based on prices? (12) - in a planned economy?
being”/ “economist” (13) - in a market economy?
(5) Examples for trade-offs made by
consumers
5.1 limited resources of consumers?
(6) Examples for trade-offs made by
workers
(7) Examples for trade-offs made by
firms
(8) the consumer theory
(9) the theory of the firm

Topics:
- The study of microeconomics
- The allocation of scare resources

QUESTIONS:
3. Why do people have to make choices of using resources/ have to make trade-offs?
4. What is the definition of trade off?
10. How are prices important?
Because prices influence/ have great impact on behavior of consumers, workers and firms.
11. What are based on prices? – All trade-offs made by ….
Topic:
1. What does the economics study?
2. How are limited resources allocated? (Talk about the first theme of microeconomics.)
All resources are limited so that people have to make choices of using them in order best satisfy their demand.
All consumers, workers and firms have to make trade-offs. For example, consumers have limited incomes so they may trade off ….
3. How do consumers have to make trade-offs? How are limited/ scarce resources allocated by consumers?
- Limited resources
- Examples
- The consumer theory describes ….
4. By workers
5. By firms
Firms have to decide what to produce, how to produce and for whom to produce.
6. What is the important role of prices?
Side effects of the market -
 Definition (1) MACROECONOMICS Two major macroeconomic policies (2)

Economic factors (3) Fiscal policy Monetary policy

- Economic growth (4) – tools (7) – tools
- (un)employment (5) – Who supervise? (8) – Who supervise?
- Inflation (6) – What to control? (9) – What to control?
- Economic policies
- Demand
- Supply
- Prices
- Balance of payments

Topics:
- The study of macroeconomics
- Differences between microeconomics and macroeconomics
QUESTIONS:
1. What does macroeconomics study?
- It studies the interactions among various economic factors as well as the economic relationships of one country with others/ with
the rest of the world.
- It studies the behavior of governments as well as the self-regulation of the market within an economy and in the global/
international market.
2. What are 2 major macroeconomic policies?
Topic:
1. What does macroeconomics study?
 - Definition 1
- Examples for economic factors/
- Examples for the interactions among them:
Lua chon 2:
- Def 2
- Chinh phu su dung chinh sach de dieu tiet nen kinh te

Definition (1) PUBLIC FINANCE

Government tax revenue Government spending Government borrowing

(11) Why to borrow? (G > T)
Payroll taxes (2) Trust funds 2 types of government debts: (18)
(7) definition - debts held by federal accounts
(8) How to use? (19)
- Individual income taxes (transfer payments) - Debts held by the public (20)
(3)
- Corporate income taxes - (12) How to borrow?
(4) Federal funds - issuing and selling G. securities
- Customs duties (5) (9) definition + selling directly (13)
- Excise taxes (6) (10) How to use? + selling indirectly (14)
- Estate tax (capital transfer (current spending +
tax/ inheritance tax) capital spending) (15) Who to borrow?
- Property tax - Domestic investors (16)
- Capital gains tax + Private investors
+ Federal Reserve (Central bank)
- VAT
+ State and local governments
- International investors (17)
+ foreign Private investors
 + Other governments
+ International financial
institutions (IMF/ WB)

13. How can the US Government sell securities directly?

It can sell securities directly through the G’s website.
Be likely + to do sth
Inflation is likely to occur/ happen immediately.
18. What are 2 types of government debts/ public debts?
They are: - debts held by federal accounts and debts held by the public
19. What are debts held by federal accounts?

1. What is public finance?

Public finance is concerned with the government’s revenue, spending and borrowings
Public finance is the management of a country’s revenue, expenditures, and debts by the governments of all levels
- Where does the government’s revenue come from?
The government’s revenue mostly comes from the collection of different types of taxes such as …

2. What are payroll taxes?

Payroll taxes include social insurance and health insurance as percentages of wages or salaries and they are paid jointly by both
employers and employees.
3. What are individual income taxes?
Individual income taxes are the taxes levied/ imposed on wages or salaries or dividends and other incomes that a person earns.
Personal income taxes are the taxes imposed on personal incomes.
4. What are corporate income taxes?
Corporate income taxes are the taxes imposed on corporate incomes.
 5. What are customs duties?
Customs duty is the tax imposed on imports and exports.
Customs duty is the tax that governments impose on export and import of goods.
Customs Duty is levied when goods are transported across borders between countries. It is the tax that governments impose on export and
import of goods. Customs Duty is beneficial for many reasons. For instance, it ensures a country’s economic stability, jobs, environment,
among others. It regulates the movement of goods in and out of the country. It keeps a check on restricted items.
https://www.financialexpress.com/what-is/customs-duty-meaning/1769174/
6. What are excise taxes?
An excise tax is a tax imposed on specific goods or services at purchase such as fuel, tobacco, and alcohol.
An excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda,
gasoline, insurance premiums, amusement activities, and betting, and make up a relatively small and volatile portion of state and local tax
collections.
https://taxfoundation.org/tax-basics/excise-tax/

What are 2 main types of the government’s tax revenue/ revenue from taxation?
2 main types of the government’s tax revenue are trust funds and federal funds.
7. What are trust funds?
Trust funds are the government’s revenue that comes from payroll taxes / that is generated from payroll taxes.
8. How are trust funds used?/ What are trust funds spent on?
Trust funds are only spent on Social Security and Medicare.
Levy (v) to officially ask for an amount of money, such as a tax, for a government or organization:
levy a tax on sth
- The tax is levied on companies' energy use.
Levy (n) an amount of money, such as a tax, that has to be paid to a government or organization:
- The financial authority is to impose a levy on every financial product sold.
be exempt from/pay a levy: được miễn
 - Social Security income that resides in a bank account is exempt from a levy.
abolish/ end a levy – bỏ (loại thuế nào đó)
- The government plans to abolish a levy on equities trading.
Trust funds are the government’s revenue that comes from payroll taxes / that is generated from payroll taxes
9. Federal funds are the government’s revenue that is generated from income taxes, customs duty, excise tax and some others.
10. How does the government use federal funds? How are federal funds used/ What are federal funds spent on?
Federal funds are used for/ spent on the G’s projects and programs including capital spending and current spending.
11. Why/For what purpose does the G have to borrow more money?
Because the G wants to spend more money than it can collects from taxation/ The G has to borrow more money to finance the budget
deficit.
What is deficit spending?

Topics:
- Government revenue: How does the government raise its revenue?
- Government spending: How does the Government allocate its revenue from taxation?
- Government borrowings: How does the government borrow more money? From whom does the government borrow money?
 Definition (1) FISCAL POLICY Two main tools of fiscal policy

Deficit spending Conducting Fiscal Policy Influencing Factors on decisions

(2) definition - Expansionary on Fiscal policy (13)
(7) definition (G / T / Both)  Inside factors (14)
- Helpful (8) When should be expansionary? - Economic factors: (15) What? Questions:
(3) When? (9) Why? (one example for + economic growth: (16) How?
+ economic growth – low illustration) + (un)employment (17) How? 15. What are
+ unemployment - high + inflation (18) How? economic factors
(4) How? (one example for - Contractionary - Non-economic factors (19) What? influencing (that/
illustration) (10) definition (G / T / Both) + political consideration which influence)
(11) When should be contractionary? + wars decisions on fiscal
(12) Why? (one example for + natural disasters policy?
- Harmful illustration) +
(5) When? 16. How does the
 Outside factors (20)
+ inflation is high (factor of) economic
- Fiscal policies of other countries
+ employment is full growth influence the
(21) Why?
(6) How? (one example for
- Requirements of international decisions on fiscal
illustration)
financial institutions (IMF) (22) policy?
Why?
When economic
growth is low, the G should run E.F.P
Topics:
- Deficit spending: helpful or harmful?
- Expansionary fiscal policy: When and Why?
- Contractionary fiscal policy: When and Why?
- Influencing factors on decisions on fiscal policy
QUESTIONS:
3. When/ in which situation/ under what circumstance is deficit spending helpful to the economy?
Deficit spending is helpful to the economy when economic growth rate is low and/ or unemployment rate is high.
4. Give one example to illustrate the helpfulness of deficit spending?
For example when the G borrows money to build a new highway, the construction will create more jobs, so that the unemployment rate
tends to reduce.
Topic
Under what circumstance is deficit spending helpful to the economy? Why?
- Kn (3)
- The G can finance the deficit by 2 ways of borrowing more money or printing more money.
- Borrowings => the construction of a highway => jobs for local people
 Incomes for both firms and workers => spend more => promote the economic
growth
When should the G run expansionary fiscal policy (When should E.F.P be expansionary) and Why?
+ definition: What is E.F.P?
Fiscal policy is expansionary when the G increases its spending or reduces taxation or combines both of them.
+ F.P. should be expansionary when economic growth rate is low and/ or unemployment rate is high
(taxation is reduced => both individuals and firms will have more incomes (money) to spend => aggregate demand increases, leading to
more production, thus the economy tends to grow.
When should the G run contractionary fiscal policy (When should E.F.P be expansionary) and Why?
+ definition: What is C.F.P?
Fiscal policy is contractionary when the G reduces its spending or increases taxation or combines both of them.
- G spending is reduced => MP decreases => AD decreases => pressure on prices, it means that the inflation tends to reduce.
- G increases taxation such as taxes on incomes => individuals & firms have less money to spend => AD decreases => pressure on
prices, it means that the inflation tends to reduce.
What factors should the G consider when it makes decisions on its fiscal policy? Why?
There are various factors for the G to consider when making decisions on the fiscal policy, including inside factors and outside factors.
Inside factors include economic factors such as ….. and non-economic factors such as …
Outside factors include ….
For example (can xem xet yeu to nao, de lam gi)
 Definition (1) MONETARY POLICY

Objectives of Monetary policy (2)
- To manage inflation
- To reduce unemployment
- To promote moderate long-term interest
rates
Tools of Monetary policy: three
- Reserve requirement
 Definition (3)
 Significance of RR (4)
 What happen if RR ? (5)
 What happen if RR ? (6)
Control over the money supply of C.B.
(Conducting M.P of C.B.)
- Expansionary monetary policy
 Definition (14) (What)
 When should MP be expansionary? (15)
 Why? (one example for illustration) (16)
 Objectives of E.M.P.

- Discount rate - Restrictive monetary policy

 Definition (7)  Definition (17)
 Significance of DR?  When should MP be restrictive? (18)
 What happen if DR ? (8)  Why? (one example for illustration) (19)
 What happen if DR ? (9)  Objectives of R.M.P.

RR & DR not used in day-to-day

operations – Why? (10)
(only to make major changes)

- Open market operations

 Definition (11)
 What happen if buying G.
securities? (12)
 What happen if selling G.
securities? (13)
 Often used in daily operations
of the Central Bank
Topic questions:
 Discuss three main tools of monetary policy
 Expansionary monetary policy: What? When and Why? (Objectives)
 Restrictive monetary policy: What? When and Why? (Objectives)
 Objectives of Expansionary monetary policy & Restrictive monetary policy?

Definition (1) FINANCIAL

MARKETS

Money markets (2) Capital markets (7) Foreign exchange markets

Short-term instruments (long-term instruments – less liquid (8) (27)
More liquid Including (9) (national currencies)
+ long-term government bonds
Short-term instruments (3) + long-term corporate bonds
+ treasury bills (4) + shares (stocks)
+ corporate bonds (5)
+ interbank lending (6)

Primary markets (10) Secondary markets (14)

+ new issues of securities + previously-issued securities + Spot markets (28)

+ sold to initial buyers (11)
including:
 Investment banks
 Stock companies
 Insurance companies
+ role of Primary markets: to
increase the issuers’ capital
+ not increase the issuers’
capital (16)
+ roles of secondary markets
(17)
 determine prices of
fresh securities in
Primary markets
+ Future markets (29)
 Role of future markets:
Help to protect the anticipated
flow of currency against
exchange rate volatility.
 (12)  make long-term
+ Issuers including: (13) instruments more liquid
 Corporations + Secondary markets –
 Governments classified into: (18)
 Financial institutions  Exchanges (19)
Transactions are made in a
single location (called the
trading floor); during fixed
hours (called the trading
session)

 OTC markets (over-

the-counter) (20)
Transactions are made via
means of communication and
throughout the day

Debt markets (21) Equity markets (24)

+ debt instruments (22) + Equity instruments (shares)

+ fixed interests to creditors (25)
(debt holders) (23) + flexible dividends to
shareholders (26)

QUESTIONS:
- What is financial markets?
- How many categorizations of financila markets?
(2) – defination

(3)
(4) defination
 (19)
(20)
(21)
(24)

1. What is the securities market?

The securities market is the market in which securities such as bonds or shares are traded/ exchanged.
1.1. What are different ways of classifying securities markets?
There are 4 ways of classifying securities markets into:
- Debt markets & equity markets
- Primary markets and secondary markets
- Secondary markets are further classified into Exchanges and OTC markets
- Money markets and capital markets
2. What are money markets?
A money market is the market in which short-term debt instruments are traded.