Ch 15 - Monetary Thoery

is typically known as the very high and accelerating inflation.

conveys how a change in the money supply affects macroeconomy.

money available for borrowing and lending.

The supply of money curve is vertical since it is not affected if the ________ moves higher or lower.

on the money market graph measures the nominal interest rate, and it indicates that it is not adjusted for inflation.

The high cost prohibits some ________ and discourages others.

theory that states a change in the money supply will affect nominal variables in the economy but not real variables.

is the task of getting funds from savers (lenders) to spenders (borrowers)

can be measured with the GDP Deflator.

is the supply of money and Md is the demand of money.

things that are expressed in non- monetary units or adjusted for inflation.

When the ________ is low, the quantity of funds demanded is higher, leading the demand curve to slope downward.

can be defined as M1 or M2, where the velocity of money is the number of times the typical dollar of M1 or M2 is used to make purchases during a year.

when they’re are high, the households and firms pare down the amount of money they hold in their wallets and transaction accounts where it earns little to no interest.

When ________, households and firms want to have more money on hand due to the fact that they conduct more transactions or more expensive transactions.

is determined by the supply and demand for money.

The amount of money supplied to the economy which is determined by the Fed and isnt affected by a change in the ________.

A rise in the ________ induced people and firms to place their funds where it can earn the higher return.

the number of times a typical unit of money is used for purchases in a year

the idea that inflation is almost proportional to the growth rate of the money supply

is typically known as the very high and accelerating inflation

theory that states a change in the money supply will affect nominal variables in the economy but not real variables

is an unadjusted rate or price, without taking inflation or other factors into account

the interest rate as states and not adjusted for inflation

is the task of getting funds from savers (lenders) to spenders (borrowers)

any firm or institution that participates in financial intermediation

money available for borrowing and lending

the interest rate adjusted for inflation

things that are expressed in non-monetary units or adjusted for inflation

is the amount of money households, firms, and government, and foreign entities want to hold as currency and in their transaction accounts