lecture19 - Economics 310 Money and Banking Lecture 19...

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Economics 310 Money and Banking Lecture 19 University of Michigan Fall 2010
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2 Distribution of Exam Averages (Exams 1 & 2) 0 5 10 15 20 25 30 30 40 50 60 70 80 90 100 Average from Exams 1 & 2 Frequency
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3 Lecture 1 Mishkin, Chapter 19 The first part of 19 (Quantity Theory) The second part of 19 (Liquidity Preference Model) Mishkin, Chapter 20 Readings New Topic: Simple Macro Models
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4 Lecture 1 Modeling the macroeconomy Main concern: determination of the level of economic activity Y = real GDP Total output (in real terms) Real National Income Real Aggregate spending P = aggregate price level P Y = nominal GDP Dollar value of output/spending/national income
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5 Lecture 1 Y = real output/income/spending P = aggregate price level M d = demand for nominal money balances v = number of times $1 can be used in a given time period “Velocity of money” v M = P Y i.e. M = P Y or M = Y . v P v Demand for money balances Real money demand is proportionate to real national income (Y) Nominal money demand is proportionate to nominal income (P Y) Quantity Theory
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6 Lecture 1
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This note was uploaded on 12/08/2010 for the course PYSCH 111 taught by Professor Malley during the Spring '08 term at University of Michigan.

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lecture19 - Economics 310 Money and Banking Lecture 19...

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