3Chp22-Econ3310 - Aggregate Supply Equilibrium Analysis P...

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Unformatted text preview: Aggregate Supply Equilibrium Analysis P ×Y M Friedman’s quantity theory: V moves in a predictable way. Changes in aggregate spending are primarily determined by changes in the money supply. V= P : price level Y : real aggregate output P × Y : aggregate nominal income/total spending V is the velocity of money : average number of times per year that a dollar is spent M ×V =P ×Y equation of exchange: Quantity Theory of Money Approach Aggregate Demand ...
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This note was uploaded on 02/14/2012 for the course ECON 3310 taught by Professor Dix during the Fall '08 term at York University.

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