Basic Economic Concepts

Exam Weight: ~6 questions (5% of exam)

This unit covers fundamental economic principles that affect investment decisions and market performance. Understanding these concepts helps investment advisers make informed recommendations based on macroeconomic conditions.

What You'll Learn

• How business cycles move through four stages and why GDP matters
• How monetary and fiscal policies drive inflation, growth, and interest rates
• How sovereign debt, geopolitical events, and currency strength affect markets
• What causes inflation and deflation, and how they affect different investments
• Why yield curves slope upward and what credit spreads signal about risk
• The structure of balance of payments and economic indicators that predict business cycles