FN0137 Financial Environments and Markets

Synopsis of Module

The module is an introduction to the functioning of a market economy and the role of government within it. It explains the economic environment within which businesses operate and enables students to identify the key factors that influence the behaviour and performance of firms and industries. Additionally, the module has the objective of introducing students to the main functions of financial markets and the principal financial institutions.

Aims of Module

The module aims to:

1.	Examine the economic and financial environments within which business organisations operate.

2.	Describe how a modern market economy functions.

3.	Explore the role of government within a domestic market context.

4.	Explain the functions of financial markets and the main roles of the principal UK financial institutions.

Learning Outcomes

On completion of their studies students should be able to:

1.	Describe the functioning of a market economy.

2.	Explain the fiscal and monetary policy roles of government and demonstrate their effect on business activity.

3.	Explain the functions of financial markets and discuss the role of the major participants therein.

4.	Explain the main roles of the principal UK financial institutions.

Outline Syllabus

Context

The business environment and the structure of economic activity.

Market for goods and services

The market process; supply and demand and their inter-relationship with costs and prices. Forms of market activity; corporate sector, public sector and not for profit organisations.

Monetary and financial system

Role of government in providing a stable context for business activity.

The nature and function of monetary and fiscal policy; interest rates, taxation and public expenditure.

Functions of financial markets

The distinction between retail and wholesale financial markets.

Money, capital and commodity markets.

Role of financial institutions

Banks, building societies and other savings vehicles.

Non- bank financial intermediaries, including insurance companies and pension funds

Summative Assessment

Assessment is 100% closed book examination - 2 hours.