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Topic 10: Aggregate Demand II (chapter 11) updated 11/15/06

Topic 10: Aggregate Demand II (chapter 11) updated 11/15/06

Topic 10: Aggregate Demand II (chapter 11) updated 11/15/06. LM. r. IS. Y. Equilibrium in the IS - LM Model. The IS curve represents equilibrium in the goods market. r 1. The LM curve represents money market equilibrium. Y 1.

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Chapter 4: Money and Inflation

Chapter 4: Money and Inflation

Chapter 4: Money and Inflation. Functions of Money. Medium of Exchange Store of Value Unit of Account Standard of Deferred Payment. Types of Money. Commodity money : a commodity with some intrinsic value used as a medium of exchange (e.g., cigarettes in POW camps)

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Chapter 4 The Meaning of Interest Rates

Chapter 4 The Meaning of Interest Rates

Chapter 4 The Meaning of Interest Rates. Preview.

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Chapter 4

Chapter 4

Chapter 4. Understanding Interest Rates. Measuring Interest Rates. Present Value: A dollar paid to you one year from now is less valuable than a dollar paid to you today Why? A dollar deposited today can earn interest and become $1 x (1+i) one year from today. Discounting the Future.

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364 views • 21 slides
Chapter 4

Chapter 4

Chapter 4. Understanding Interest Rates. Present Value. A dollar paid to you one year from now is less valuable than a dollar paid to you today Why? A dollar deposited today can earn interest and become $1 x (1+i) one year from today. Discounting the Future. Simple Present Value. Time Line.

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215 views • 21 slides
Money and Inflation

Money and Inflation

Money and Inflation. An introduction. Introduction. In this section we will discuss the quantity theory of money, discuss inflation and interest rates, and the relationship between the nominal interest rate and the demand for money. The Quantity Equation.

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