The Gap Effect, and the Expectation Effect

THE WONDERFUL WORLD OF INFLATION: People talk about inflation a LOT, so its probably a good idea know what it is. If you've survived macroeconomics without knowing what inflation is up until this point, congratulations, you live a seriously charmed...

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The Transmission Mechanism

So... what happens when the money supply changes? How does this affect things? That's what we're going to figure out today! Remember the marginal efficiency of investment function...

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The Demand & Supply for Money

The Liquidity Preference Function: This shows people's preference to hold money (cash balances) rather than bonds (interest bearing assets) -People have a choice between holding their wealth in one of two ways: bonds or money -Money pays no returns,...

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Bonds!

TODAY: WE ARE GOING TO LEARNING ABOUT THE MONEY MARKET: This basically let's us understand how the money supply determines the interest rate BONDS: What are bonds... Well... Wealth is accumulated purchasing power, and wealth can be held in assets, or...

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MONEY MONEY MONEY

Money Money Money! THE NATURE OF MONEY -Classical economists arbitrarily divided economies into the real sector, and the monetary sector.-The REAL SECTOR describes the allocation of resources to produce different goods-Resource allocation (use of...

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