ECON 330 Lecture Notes - Lecture 1: Monetary Base, Money Supply, Money Multiplier
Document Summary
Overall the period of 2009-2014 saw an increase in the monetary base (over 2,000,000), however, there were short term periods within this range that saw small decreases or lack of movement in the monetary base. The monetary base periods of flat- lining and periods of loss, however, still follows the small overall upward trend that the. M1 money stock does, just at a less stable level. Money multiplier: the ratio between the quantity of money and the monetary base; the quantity of money (m) equals the money multiplier (m) time the monetary base (mb), There appears to have been a significant decrease in the money multiplier in the middle of the recession, however, fluctuations following the recession do not appear to be as drastic. Actual gdp: real gdp: measure of the value of economic output adjusted for price changes (inflation/deflation). This adjustment transforms the money-value measure into an index for quantity of total output.
