Economics 10b Chapter Notes - Chapter 30: Open Market Operation, Economic Equilibrium, Money Multiplier

97 views7 pages

Document Summary

The level of prices and the value of money. When the overall price level rises, the value of money falls. Money supply, money demand, and monetary equilibrium. Variable affecting demand for money: the average level of prices in the economy. When an increase in the money supply makes dollars more plentiful, the result is an increase in the price level that makes each dollar less valuable. Quantity theory of money: a theory asserting that the quantity of money available determines the price level and that the growth rate in the quantity of money available determines the inflation rate. Milton friedman: inflation is always and everywhere a monetary phenomenon. A brief look at the adjustment process the immediate effect of a monetary injection is to create an excess supply of money. Helicopter example: quantity supplied is greater than quantity demanded. Economy"s output of goods and services is determined by: Greater demand for goods and services causes price to increase.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

Related Questions