ECON 460 Lecture Notes - Lecture 6: Money Supply, Bourgeoisie

• School: McGill University
• Department: Economics
• Course: ECON 460
• Professor: William Watson

Document Summary

Up to and inclusing chp 6 in backhouse for midterm. Neutrality of money= it is neutral at least in the long term = increase in money supply, nothing will change in the long run. Increase in short term, increase in demand, increase in prices. Hu(cid:373)e (cid:271)elie(cid:448)es (cid:373)o(cid:374)ey is (cid:374)eut(cid:396)al= says that i(cid:374)(cid:272)(cid:396)ease i(cid:374) le(cid:448)el of gold a(cid:374)d sil(cid:448)e(cid:396) (cid:449)o(cid:374)"t ha(cid:448)e a(cid:374) a(cid:272)tual effect on the interest rate. No. of borrowers and lenders and degree of industry in the country will affect the interest rate. I(cid:374) hu(cid:373)e"s opi(cid:374)io(cid:374), ge(cid:374)t(cid:396)y a(cid:396)e useless a(cid:374)d (cid:449)asteful i(cid:374) e(cid:272)o(cid:374)o(cid:373)y, they just (cid:272)o(cid:374)su(cid:373)e. bou(cid:396)geois (traders, merchants) are healthy for the economy= they become greedier with regards to accumulating money. If only borrowers are those who want to party (gentry), then that financial system is a poor, wasteful one= not contributing to the economy. Interaction of saving with investment => interest rate.