Chapter4LectureNotes

Chapter4LectureNotes - Basics The Quantity Theory of Money...

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Basics The Quantity Theory of Money Inflation and Interest Rates Money Demand, Revisited Economic Costs of Inflation Unexpected Inflation The Benefits of Inflation Hyperinflation The Classical Dichotomy Intermediate Macroeconomics, 321 Chapter 4 Money and Inflation Instructor Geoffrey Williams Rutgers University June 4, 2009 Instructor Geoffrey Williams Chapter 4
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Basics The Quantity Theory of Money Inflation and Interest Rates Money Demand, Revisited Economic Costs of Inflation Unexpected Inflation The Benefits of Inflation Hyperinflation The Classical Dichotomy Outline 1 Basics 2 The Quantity Theory of Money 3 Inflation and Interest Rates 4 Money Demand, Revisited 5 Economic Costs of Inflation Instructor Geoffrey Williams Chapter 4
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Basics The Quantity Theory of Money Inflation and Interest Rates Money Demand, Revisited Economic Costs of Inflation Unexpected Inflation The Benefits of Inflation Hyperinflation The Classical Dichotomy Clicker Question Economists use the term money to refer to: (A) income (B) profits (C) assets used for transactions (D) earnings from labor Instructor Geoffrey Williams Chapter 4
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Basics The Quantity Theory of Money Inflation and Interest Rates Money Demand, Revisited Economic Costs of Inflation Unexpected Inflation The Benefits of Inflation Hyperinflation The Classical Dichotomy Answer C: Assets used for transactions are usually referred to as money. Instructor Geoffrey Williams Chapter 4
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Basics The Quantity Theory of Money Inflation and Interest Rates Money Demand, Revisited Economic Costs of Inflation Unexpected Inflation The Benefits of Inflation Hyperinflation The Classical Dichotomy Clicker Question All of the following are considered major functions of money except as a (A) medium of exchange (B) way to display wealth (C) unit of account (D) store of value Instructor Geoffrey Williams Chapter 4
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Basics The Quantity Theory of Money Inflation and Interest Rates Money Demand, Revisited Economic Costs of Inflation Unexpected Inflation The Benefits of Inflation Hyperinflation The Classical Dichotomy Answer B: no need to use money to display wealth - that’s what Porsches are for. The other three uses are major : medium of exchange, unit of account, store of value. Instructor Geoffrey Williams Chapter 4
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Basics The Quantity Theory of Money Inflation and Interest Rates Money Demand, Revisited Economic Costs of Inflation Unexpected Inflation The Benefits of Inflation Hyperinflation The Classical Dichotomy Types of Money Fiat money is what we have today. Essentially, our dollars are moneybecause the US government says theyre money Before, we had the gold standard , where every US dollar could be redeemed for a fixed quantity of gold The gold standard is one example of commodity money Another common commodity currency has been salt - this is where “salary” and the phrase “worth his salt” come from.
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This note was uploaded on 02/29/2012 for the course 320 322 taught by Professor Macro-williams,micro-yoshi during the Fall '10 term at Rutgers.

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Chapter4LectureNotes - Basics The Quantity Theory of Money...

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