{"id":243,"date":"2019-12-07T22:26:50","date_gmt":"2019-12-07T22:26:50","guid":{"rendered":"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=243"},"modified":"2025-01-14T10:10:47","modified_gmt":"2025-01-14T10:10:47","slug":"learning-sessions-curriculum-economics","status":"publish","type":"post","link":"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/learning-sessions-curriculum-economics\/","title":{"rendered":"CFA Level 1 Study Notes &#8211; Economics"},"content":{"rendered":"<h2><strong>Study Session 4<\/strong><\/h2>\n<h2><strong>Reading 8 &#8211; Topics in Demand and Supply Analysis<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/income-elasticity-price-elasticity-and-cross-elasticity\/\">LOS a: calculate and interpret price, income, and cross-price elasticities of demand and describe factors that affect each measure;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/income-and-substitution-effects\/\">-LOS b: compare substitution and income effects;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/normal-and-inferior-goods\/\">-LOS c: contrast normal goods with inferior goods;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/law-of-diminishing-marginal-returns\/\">-LOS d: describe the phenomenon of diminishing marginal returns;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/break-even-and-shut-down-points-of-production\/\">-LOS e: determine and interpret breakeven and shutdown points of production;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/economies-and-diseconomies-of-scales\/\">-LOS f: describe how economies of scale and diseconomies of scale affect costs.<\/a><\/p>\n<h2><strong>Reading 9 for &#8211; The Firm and Market Structures<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/market-structures\/\">-LOS a: describe characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/price-marginal-cost-marginal-revenue-economic-profit-and-the-elasticity-of-demand\/\">-LOS b: explain relationships between price, marginal revenue, marginal cost, economic profit, and the elasticity of demand under each market structure;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/supply-function-under-different-market-structures-2\/\">-LOS c: describe a firm\u2019s supply function under each market structure;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/optimal-price-and-output-levels-under-different-market-structures\/\">-LOS d: describe and determine the optimal price and output for firms under each market structure;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/long-run-equilibrium-under-each-market-structure\/\">-LOS e: explain factors affecting long-run equilibrium under each market structure;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/pricing-strategy-under-each-market-structure\/\">-LOSf: describe pricing strategy under each market structure;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/use-and-limitation-of-concentration-measures-in-identifying-market-structure\/\">-LOS g: describe the use and limitations of concentration measures in identifying market structure;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/market-structure-within-which-a-firm-operates-2\/\">-LOS h. identify the type of market structure within which a firm operates<\/a><\/p>\n<h2><strong>Reading 10 &#8211; Aggregate Output, Prices, And Economic Growth<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/calculating-gdp-using-expenditure-and-income-approaches\/\">-LOS a. calculate and explain gross domestic product (GDP) using expenditure and income approaches;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/uncategorized\/value-of-final-output-and-sum-of-value-added-methods-of-calculating-gdp\/\">-LOS b. compare the sum-of-value-added and value-of-inal-output methods of calculating GDP;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/uncategorized\/nominal-gdp-real-gdp-and-gdp-deflator\/\">-LOS c. compare nominal and real GDP and calculate and interpret the GDP delator;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/uncategorized\/comparing-gdp-national-income-personal-income-and-personal-disposable-income\/\">-LOS d. compare GDP, national income, personal income, and personal disposable income;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/fundamental-relationship-among-saving-investment-fiscal-balance-and-trade-balance\/\">-LOS e. explain the fundamental relationship among saving, investment, the fiscal balance, and the trade balance;<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/aggregate-demand\/\">-LOS f. explain how the aggregate demand curve is generated;<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/aggregate-supply\/\">-LOS g. explain the aggregate supply curve in the short run and long run;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/movements-along-and-shifts-in-aggregate-demand-and-supply-curves-2\/\">-LOS h. explain causes of movements along and shifts in aggregate demand and supply curves;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/fluctuations-in-aggregate-demand-and-supply\/\">-LOS i. describe how luctuations in aggregate demand and aggregate supply cause short-run changes in the economy and the business cycle;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/long-run-full-employment-recessionary-gap-inflationary-gap-and-stagflation\/\">-LOS j. distinguish among the following types of macroeconomic equilibria: long-run full employment, short-run recessionary gap, short-run inlationary gap, and short-run staglation;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/short-run-macroeconomic-equilibrium-below-or-above-full-employment\/\">-LOS k. explain how a short-run macroeconomic equilibrium may occur at a level above or below full employment;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/effects-of-combined-changes-in-aggregate-demand-and-supply-on-the-economy\/\">-LOS l. analyze the effect of combined changes in aggregate supply and demand on the economy;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/economic-growth\/\">-LOS m. describe sources, measurement, and sustainability of economic growth;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/production-function-approach-to-analyzing-the-sources-of-economic-growth\/\">-LOS n. describe the production function approach to analyzing the sources of economic growth;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/input-growth-and-growth-of-total-factor-productivity-as-components-of-economic-growth\/\">-LOS o. define and contrast input growth with growth of total factor productivity as components of economic growth;<\/a><\/p>\n<h2><strong>Reading 11 &#8211; Understanding Business Cycles<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/business-cycle-and-its-phases\/\">-LOS a. describe the business cycle and its phases;<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/credit-cycles\/\">-LOS b. describe credit cycles;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/economics\/\">-LOS c describe how resource use, consumer and business activity, housing sector activity, and external trade sector activity vary as an economy moves through the business cycle&nbsp;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/theories-of-the-business-cycle\/\">-LOS d. describe theories of the business cycle&nbsp;<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/economic-indicators-uses-limitations\/\">-LOS e. interpret a set of economic indicators, and describe their uses and limitations&nbsp;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/types-and-measures-of-unemployment-cfa-level-1-analystprep\/\">-LOS f. describe types of unemployment, and compare measures of unemployment&nbsp;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/inflation-hyperinflation-disinflation-and-deflation\/\">-LOS g. explain inflation, hyperinlation, disinlation, and delation&nbsp;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/construction-of-indices-used-to-measure-inflation\/\">-LOS h. explain the construction of indexes used to measu re inlation;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/uses-and-limitation-of-inflation-measures\/\">-LOS i. compare inflation measures, including their uses and limitations&nbsp;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/cost-push-and-demand-pull-inflation\/\">-LOS j. contrast cost-push and demand-pull inlation&nbsp;<\/a><\/p>\n<h2><strong>Reading 12 &#8211; Monetary and Fiscal Policy<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/comparison-of-monetary-and-fiscal-policy\/\">-LOS a: compare monetary and fiscal policy;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/function-and-definition-of-money\/\">-LOS b: describe functions and deinitions of money;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/money-creation-process\/\">-LOS c: explain the money creation process;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/demand-and-supply-of-money-2\/\">-LOS d: describe theories of the demand for and supply of money;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/the-fisher-effect\/\">-LOS e: describe the Fisher effect;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/roles-and-objectives-of-central-banks\/\">-LOS f: describe roles and objectives of central banks;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/32071\/\">-LOS g: contrast the costs of expected and unexpected inlation;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/implementing-monetary-policy\/\">-LOS h: describe tools used to implement monetary policy;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/monetary-transmission-mechanism\/\">-LOS i: describe the monetary transmission mechanism;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/qualities-of-effective-central-banks\/\">-LOS j: describe qualities of effective central banks;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/economic-growth-inflation-interest-and-exchange-rates-2\/\">-LOS k: explain the relationships between monetary policy and economic growth, inlation, interest, and exchange rates;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/central-banks-targets-2\/\">-LOS l: contrast the use of inlation, interest rate, and exchange rate targeting by central banks;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/expansionary-and-contractionary-monetary-policies\/\">-LOS m: determine whether a monetary policy is expansionary or contractionary;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/uncategorized\/limitations-of-monetary-policy\/\">-LOS n: describe limitations of monetary policy;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/fiscal-policy\/\">-LOS o: describe roles and objectives of fiscal policy;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/tools-of-fiscal-policy\/\">-LOS p: describe tools of fiscal policy, including their advantages and disadvantages;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/size-of-a-national-debt-relative-to-gdp\/\">-LOS q: describe the arguments about whether the size of a national debt relative to GDP matters;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/implementing-of-fiscal-policy\/\">-LOS r: explain the implementation of fiscal policy and dificulties of implementation;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/expansionary-and-contractionary-fiscal-policies\/\">-LOS s: determine whether a fiscal policy is expansionary or contractionary;<\/a><br \/>\n<a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/interaction-between-monetary-and-fiscal-policies\/\">-LOS t: explain the interaction of monetary and fiscal policy.<\/a><\/p>\n<h2><strong>Reading 13 &#8211; Introduction to Geopolitics<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/geopolitics\/\">LOSa: describe geopolitics from a cooperation versus competition perspective <\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/geopolitics-and-globalization\/\">LOSb: describe geopolitics and its relationship with globalization<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/uncategorized\/tools-of-geopolitics\/\">LOSc: describe tools of geopolitics and their impact on regions and economies<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/impact-of-geopolitical-risk-on-investment\/\">LOSd: describe geopolitical risk and its impact on investment<\/a><\/p>\n<h2><strong>Reading 14 &#8211; International Trade and Capital Flows<\/strong><\/h2>\n<p>&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/compare-gross-domestic-product-gnp\/\">LOS a: compare gross domestic product and gross national product<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/describe-benefits-costs-international-trade\/\">LOS b: describe benefits and costs of international trade<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/comparative-advantage-vs-absolute-advantage\/\">LOS c: distinguish between comparative advantage and absolute advantage<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/ricardian-heckscher-ohlin-models-trade\/\">LOS d: explain the Ricardian and Heckscher\u2013Ohlin models of trade and the source(s) of comparative advantage in each model<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/implications-trade-capital-restrictions\/\">LOS e: compare types of trade and capital restrictions and their economic implications<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/trading-blocs-economic-unions\/\">LOS f: explain motivations for and advantages of trading blocs, common markets, and economic unions<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/objectives-capital-restrictions\/\">LOS g: describe common objectives of capital restrictions imposed by governments<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/balance-of-payments-accounts\/\">LOS h: describe the balance of payments accounts including their components<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/decisions-affect-balance-payments\/\">LOS i: explain how decisions by consumers, firms, and governments affect the balance of payments<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/international-organizations\/\">LOS j: describe functions and objectives of the international organizations that facilitate trade, including the World Bank, the International Monetary Fund, and the World Trade Organization<\/a><\/p>\n<h2><strong>Reading 15 &#8211; Currency Exchange Rates<\/strong><\/h2>\n<p>&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/exchange-rates\/\">LOS a: define an exchange rate and distinguish between nominal and real exchange rates and spot and forward exchange rates<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/foreign-exchange-market\/\">LOS b: describe functions of and participants in the foreign exchange market<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/relative-currency\/\">LOS c: calculate and interpret the percentage change in a currency relative to another currency<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/calculate-and-interpret-currency-cross-rates\/\">LOS d: calculate and interpret currency cross-rates<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/forward-quotations-from-forward-points\/\">LOS e: calculate an outright forward quotation from forward quotations expressed on a points basis or in percentage terms<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/arbitrage-relationship-forward-spot-rates\/\">LOS f: explain the arbitrage relationship between spot rates, forward rates, and interest rates<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/calculate-interpret-forward-discount-premium\/\">LOS g: calculate and interpret a forward discount or premium<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/forward-rate-each-currency\/\">LOS h: calculate and interpret the forward rate consistent with the spot rate and the interest rate in each currency<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/describe-exchange-rate-regimes\/\">LOS i: describe exchange rate regimes<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/exchange-rates-international-trade\/\">LOS j: explain the effects of exchange rates on countries\u2019 international trade and capital flows<\/a><\/p>\n<h2>2024 Curriculum<\/h2>\n<h3 style=\"text-align: left;\" align=\"left\"><strong><span lang=\"EN-US\">Learning Module 1 \u2013 The Firm and Market Structures<\/span><\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/breakeven-analysis\/\" target=\"_blank\" rel=\"noopener\">LOS a: determine and interpret breakeven and shutdown points of production, as well as how economies and diseconomies of scale affect costs under perfect and imperfect competition<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/characteristics-of-market-structures\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/monopolistic-competition\/\" target=\"_blank\" rel=\"noopener\">LOS c: explain supply and demand relationships under monopolistic competition, including the optimal price and output for firms as well as pricing strategy<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/oligopoly-competition\/\" target=\"_blank\" rel=\"noopener\">LOS d: explain supply and demand relationships under oligopoly, including the optimal price and output for firms as well as pricing strategy<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/identifying-the-type-of-market-structures\/\" target=\"_blank\" rel=\"noopener\">LOS e: identify the type of market structure within which a firm operates and describe the use and limitations of concentration measures<\/a><\/p>\n<h3><strong><span lang=\"EN-US\">Learning Module 2 <\/span><\/strong><strong><span lang=\"EN-US\">\u2013 <\/span><\/strong><strong><span lang=\"EN-US\">Understanding Business Cycles<\/span><\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/business-cycle-and-its-phases-2\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe the business cycle and its phases<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/credit-cycles-2\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe credit cycles<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/economic-indicators-over-the-business-cycle\/\" target=\"_blank\" rel=\"noopener\">LOS c: describe how resource use, consumer and business activity, housing sector activity, and external trade sector activity vary over the business cycle and describe their measurement using economic indicators<\/a><\/p>\n<h3><strong><span lang=\"EN-US\">Learning Module 3 <\/span><\/strong><strong><span lang=\"EN-US\">\u2013 Fiscal Policy<\/span><\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/compare-monetary-and-fiscal-policy\/\" target=\"_blank\" rel=\"noopener\">LOS a: compare monetary and fiscal policy<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/roles-and-objectives-of-fiscal-policy\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe roles and objectives of fiscal policy as well as arguments as to whether the size of a national debt relative to GDP matters<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/tools-of-fiscal-policy-2\/\" target=\"_blank\" rel=\"noopener\">LOS c: describe tools of fiscal policy, including their advantages and disadvantages<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/implementation-of-fiscal-policy\/\" target=\"_blank\" rel=\"noopener\">LOS d: explain the implementation of fiscal policy and the difficulties of implementation as well as whether a fiscal policy is expansionary or contractionary<\/a><\/p>\n<h3><strong><span lang=\"EN-US\">Learning Module 4 <\/span><\/strong><strong><span lang=\"EN-US\">\u2013 Monetary Policy<\/span><\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/the-roles-and-objectives-of-central-banks\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe the roles and objectives of central banks<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/tools-of-monetary-policy\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe tools used to implement monetary policy tools and the monetary transmission mechanism, and explain the relationships between monetary policy and economic growth, inflation, interest, and exchange rates<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/central-banks-and-limitations-of-monetary-policy\/\" target=\"_blank\" rel=\"noopener\">LOS c: describe qualities of effective central banks; contrast their use of inflation, interest rate, and exchange rate targeting in expansionary or contractionary monetary policy; and describe the limitations of monetary policy<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/interaction-of-monetary-and-fiscal-policy\/\" target=\"_blank\" rel=\"noopener\">LOS d: explain the interaction of monetary and fiscal policy<\/a><\/p>\n<h3><strong><span lang=\"EN-US\">Learning Module 5 <\/span><\/strong><strong><span lang=\"EN-US\">\u2013 <\/span>Introduction to Geopolitics<\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/geopolitics-from-cooperation-and-competition-perspectives\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe geopolitics from a cooperation versus competition perspective <\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/globalization\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe geopolitics and its relationship with globalization <\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/international-organizations-2\/\" target=\"_blank\" rel=\"noopener\">LOS c: describe functions and objectives of the international organizations that facilitate trade, including the World Bank, the International Monetary Fund, and the World Trade Organization<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/explaining-geopolitical-risk\/\" target=\"_blank\" rel=\"noopener\">LOS d: describe geopolitical risk <\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/tools-of-geopolitics-2\/\" target=\"_blank\" rel=\"noopener\">LOS e: describe tools of geopolitics and their impact on regions and economies <\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/impact-of-geopolitical-risk-on-investment-2\/\" target=\"_blank\" rel=\"noopener\">LOS f: describe the impact of geopolitical risk on investments<\/a><\/p>\n<h3><strong><span lang=\"EN-US\">Learning Module 6 <\/span><\/strong><strong><span lang=\"EN-US\">\u2013 International Trade<\/span><\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/costs-and-benefits-of-international-trade\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe the benefits and costs of international trade<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/types-of-trade-restrictions\/\" target=\"_blank\" rel=\"noopener\">LOS b: compare types of trade restrictions, such as tariffs, quotas, and export subsidies, and their economic implications<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/economics\/trading-blocs\/\" target=\"_blank\" rel=\"noopener\">LOS c: explain the motivations for and advantages of trading blocs, common markets, and economic unions<\/a><\/p>\n<h3><strong><span lang=\"EN-US\">Learning Module 7 <\/span><\/strong><strong><span lang=\"EN-US\">\u2013 Capital Flows and the FX Market<\/span><\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=47117\" target=\"_blank\" rel=\"noopener\">LOS a: describe the foreign exchange market, including its functions and participants, distinguish between nominal and real exchange rates, and calculate and interpret the percentage change in a currency relative to another currency<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=47123\" target=\"_blank\" rel=\"noopener\">LOS b: describe exchange rate regimes and explain the effects of exchange rates on countries\u2019 international trade and capital flows<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=47128\" target=\"_blank\" rel=\"noopener\">LOS c: describe common objectives of capital restrictions imposed by governments<\/a><\/p>\n<h3><strong><span lang=\"EN-US\">Learning Module 8 <\/span><\/strong><strong><span lang=\"EN-US\">\u2013 Exchange Rate Calculations<\/span><\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46793\" target=\"_blank\" rel=\"noopener\">LOS a: calculate and interpret currency cross-rates<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46799\" target=\"_blank\" rel=\"noopener\">LOS b: explain the arbitrage relationship between spot and forward exchange rates and interest rates, calculate a forward rate using points or in percentage terms, and interpret a forward discount or premium<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Study Session 4 Reading 8 &#8211; Topics in Demand and Supply Analysis LOS a: calculate and interpret price, income, and cross-price elasticities of demand and describe factors that affect each measure; -LOS b: compare substitution and income effects; -LOS c:&#8230;<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-243","post","type-post","status-publish","format-standard","hentry","category-economics","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>CFA Level 1 Economics Study Notes | AnalystPrep<\/title>\n<meta name=\"description\" content=\"CFA Level 1 Economics study notes summarise each learning objective with examples, providing concise preparation for exam success in economics topics.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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