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CH4%3a19Outline ECO 3203

CH4%3a19Outline ECO 3203 - What does price measure Money...

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Chapter 4 and Chapter 19 Outline Chapter 4: I will not lecture on pages 100-112. Read these on your own. Chapter 19: I will cover section 19-1 only. What do we know so far? Labor market determines real wage and employment Desired capital stock why do firms buy new capital? Loanable funds market determines real interest rate Production function identifies output given the inputs Static analysis level of the variables vs. growth rates Real analysis variables are measured in real terms Open economy exchange rates, trade balance, capital flows
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Unformatted text preview: What does price measure? Money: • What is it? • Functions • The Federal Reserve • Measuring the money supply • Monetary policy • Open market operations • Banks and money creation Quantity theory of money: • Why do people hold money? • Velocity of money • Money demand function (simple version) • Real money supply • Velocity and money demand • Inflation and money growth Real and nominal interest rates (again) Interest rates and money demand: the money market (a preview)...
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