Macroeconomics ch 30

The flashcards below were created by user fillup on FreezingBlue Flashcards.

  1. Quantity theory of money
    A theory asserting that the quantity of money available dtermines the price and that the growth rate in the quantity of money available determines the inflation rate.
  2. Nominal Variables
    Variables measured in monetary units.
  3. Real Variables
    Variables measured in physical units.
  4. Classical dichotomy
    The theoretical separation of nominal and ral variables.
  5. Monetary neutrality
    The proposition that changes in the money supply do not affect real variables.
  6. Velocity of money
    The rate at which money changes hands.
  7. Quantity equation
    The equation M x V = P x Y relates the quantity of money, the velocity of money, and the dollar value of the economy's output of goods and services
  8. Inflation tax
    The revenue the government raises by creating money.
  9. Fisher effect
    The one-for-one adjustment of the nominal interest rate to the inflation rate.
  10. Shoeleather costs
    The resources wasted when inflation encourages people to reduce thier money holdings.
  11. Menu costs
    The costs of changing prices.
Card Set:
Macroeconomics ch 30

Show Answers: