ECON 203 Study Guide - Comprehensive Final Exam Guide - Gross Domestic Product, Promiscuity, Operating System

• School: University of Calgary
• Department: Economics
• Course: ECON 203
• Professor: Sonja Chen

Document Summary

E (cid:2104) (cid:2103) 0- . Inflation: increase in the overall level of price. Deflation: fall in the overall level of prices. Classical theory of inflation: the economy"s overall price level can be viewed in two ways: as the prices of a basket of goods and services, as a measure of the value of money. Money supply: the value of money is determined by the supply and demand for money. Money equilibrium: in the long run, overall level of prices adjusts to the level at which demand for money equals to supply. Quantity theory of money: theory asserting that: the quantity of money available determines the price level, the growth rate in the quantity of money available determines the inflation rate. Classical dichotomy and monetary neutrality: nominal variables: variables measure in monetary units, ex: prices, wages, and exchange rates, real variables: variables measured in physical units, ex: employment, real gdp, real consumption.