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                    NATIONAL OPEN UNIVERSITY OF NIGERIA 
                                     
                                     
                      ADVANCED MONETARY ECONOMICS 
                                 ECO 717 
                                     
                        FACULTY OF SOCIAL SCIENCES 
                                     
                              COURSE GUIDE 
                                     
                              Course Developers: 
                              Dr Amaka G. Metu 
                                   and 
                              Dr Chris U. Kalu 
                    Economics Department, Faculty of Social Sciences, 
                      Nnamdi Azikiwe University Awka, Nigeria 
          
                                Course Editor: 
                         Prof Ndubuisi Marcellinus Nwaru 
                    Economics Department, Faculty of Social Sciences, 
                     Imo State University, Owerri, Imo State Nigeria 
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               © 2020 by NOUN Press  
               National Open University of Nigeria, 
                
                
                
                
                
               CONTENTS 
               Introduction                                                                                   
               Course Content                                                                                 
               Course Aim                                                                                     
               Course Objective                                                                               
               Working through this Course                                                                    
               Course Materials                                                                 
               Study Units                                                                                    
               Textbooks and References                                                                       
               How to get the Most from This Course                                                    
               Tutors and Tutorials                                                                    
               Summary                                                                                 
                                                    
                
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                        INTRODUCTION 
       Welcome to ECO 717: ADVANCED MONETARY ECONOMICS 
       ECO 717: Advanced Monetary Economics is a two credit and one semester postgraduate 
       Diploma (PGD) course for Economics students. This course is made up of twelve units 
       spread across fifteen lecture weeks. This course gives you the foundational insight and 
       overview of Monetary Economics in a much wider perspective. It also guides you on how 
       to apply the pedagogical approach to Monetary Economics analysis. It equally educates 
       you  on  the  course  materials  and  the  requirements  for  success  and  how  to  navigate 
       meaningfully the materials. It also offers  some standard  guidelines on the study unit 
       durations for achieving the objectives optimally. The tutor marked assignments (TMAs) 
       with answers within the material are essentially added. 
        
       Course Content 
       This course is essentially on Advanced Monetary Economics. The monetary sector is a 
       major policy analytic sector of the economy; therefore, a study of Advanced Monetary 
       Economics offers you the avenue to contribute to the analysis of the monetary sector as a 
       trained and skillful economist. The course arms you with the monetary economics analytic 
       apparatus. Basically, the topics are as follows: The nature and role of money; the demand 
       and supply of money under equilibrium condition and monetary policy analysis. As an 
       addendum, balance of payments (BoPs) and financial institutions are equally included for 
       complete and overall discussion on Advanced Monetary Economics. This will better equip 
       you in understanding issues concerning the monetary sector. 
        
       Course Aims  
       The  aim  of  this  course,  Advanced  Monetary  Economics  is  to  give  you  an  in-depth 
       understanding of the monetary economics as regards: 
         •  Scope of Monetary Economics 
         •  Meaning and nature of money 
         •  The different functions of money  
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         •  Money demand and determinants 
         •  The Quantity Theory of Money 
         •  Money supply and monetary equilibrium. 
         •  Measurement of money  
         •  Monetary policy analysis 
         •  Structure of balance of payment account 
         •  Role of monetary policy in LDCs 
         •  Financial Institutions 
         •  International financial institutions.  
       Course Objectives                                                           
       To achieve the aims of this course, there are different specific objectives in each unit which 
       the course is set to achieve after each teaching. After each unit, you are expected to refer 
       back to the stated objectives and assess yourself to be sure you have understood what is 
       expected after each unit. By the end of the course period, you are expected to be able to:  
         •  Discuss the scope and importance of Monetary Economics  
         •  Define money 
         •  Explain the functions of money   
         •  Define the concept of money value  
         •  Explain the motives for holding demand  
         •  Illustrate the determinants of money demand 
         •  Enumerate the theories of money demand   
         •  Enumerate Fisher’s quantity theory of money 
         •  Discuss Cambridge cash balance approach to quantity theory of money 
         •  Highlight the superiority of cash balance version over Fisher’s quantity theory of 
          money  
         •  Explain the meaning of monetary policy  
         •  Identify the objectives of monetary policy  
         •  Discuss the instruments of monetary policy 
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