Chapter 11 Money Growth And Inflation

Chapter 11 Money Growth And Inflation - Inflation The Cause...

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Unformatted text preview: Inflation The Cause of Inflation in the Long Run The Level of Prices and the Value of Money Two Alternative Views of the Price Level 11-1 1 Money Supply, Money Demand and Monetary Equilibrium 1 11-2 How Supply and Demand for Money Determine the Equilibrium Price 11-3 11-4 The Effects of a Monetary Injection 11-5 The Effects of a Monetary Injection 11-6 Quantity Theory of Money Velocity of Money Examples 11-7 The Equation of Exchange o M x V = P x Y 11-8 Two Important Properties of the Quantity Theory 1 st Property 11-9 Monetary Neutrality Example o Nominal variables are those variables measured in dollars o Real variables are those measured in physical units or relative prices o A change in the money supply affects the value of nominal variables because the price level is determined by the equilibrium of the supply and demand for money o Real variables, such as goods and services or real wages, are not affected by changes...
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Chapter 11 Money Growth And Inflation - Inflation The Cause...

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