Economics: CFA® Level I

It is 6–9% of the 2027 Level I exam. 27 learning outcomes across 8 learning modules.

260+ practice questions and 6 formula cards on this topic in the app.

The Firm and Market Structures

• Contrast monopoly, perfect competition and the market structures in between
• Set out how the concentration of an industry can be measured
• Find where a firm would break even and where it would shut down
• Explain how firms set price and quantity in oligopoly and monopolistic competition

Understanding Business Cycles

• Set out the stages the business cycle passes through
• Explain the credit cycle and how it interacts with the wider business cycle
• Read unemployment measures and say what they show
• Explain how inflation is gauged and what the figures tell us

Fiscal Policy

• Set out what fiscal policy aims to do and the tools it uses
• Explain the lags and constraints that limit fiscal policy

Monetary Policy

• Set out what central banks do and the goals they pursue
• Set out the instruments available for monetary policy
• Explain the constraints on what monetary policy can achieve
• Explain how fiscal and monetary policy work together or against each other

Introduction to Geopolitics

• Explain geopolitical risk and how it bears on investments
• Explain geopolitics and globalisation and what the IMF, WTO and World Bank each do
• Set out the instruments of geopolitics and how they affect economies and investments

International Trade

• Set out the gains from international trade and what it costs
• Contrast the various trade restrictions and what each one does
• Explain economic unions, common markets and trading blocs

Capital Flows and the FX Market

• Contrast the various currency regimes
• Explain the effect of exchange rates on trade flows and capital flows
• Tell real exchange rates apart from nominal ones and find the percentage move in a currency
• Explain what governments aim to achieve by restricting capital flows

Exchange Rate Calculations

• Read and explain quotes for spot and forward exchange rates
• Work out cross-rates between currencies and explain what they mean
• Derive a forward rate from the two interest rates and explain a currency's forward premium or discount