ECN 204 Lecture Notes - Lecture 12: Unemployment Benefits, Demand For Money, Aggregate Demand
Document Summary
Readings: chapters 15 (please read the related topics from other introductory level of macroeconomics textbooks for your own benefits). You have to make your own note from lecture. Chapter 15 the influence of monetary and fiscal policy on aggregate demand. In this chapter, look for the answers to these questions: Aggregate demand: recall, the ad curve slopes downward for three reasons, the wealth effect, the interest-rate effect, the exchange-rate effect, next: A supply-demand model that helps explain the interest-rate effect and how monetary policy affects aggregate demand. Page 1 of 12: the variables that influence money demand: Money demand: suppose real income (y) rises. Households want to buy more g&s, so they need more money. To get this money, they attempt to sell some of their bonds. I. e. , an increase in y causes an increase in money demand, other things equal. A c t i v e l e a r n i n g 1.
