macro

Card Set Information

Author:
Anonymous
ID:
3044
Filename:
macro
Updated:
2009-12-14 00:06:54
Tags:
money growth and inflation
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Description:
terms
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  1. inflation
    increase in overall level of prices
  2. deflation
    decrease in overall level of prices
  3. hyperinflation
    extraordinairly high rate of inflation
  4. quantity theory of money
    a theory asserting that the quantity of money available determines the price level and that growth rate in the quantity of money available determines the inflation rate
  5. nominal variables
    variables measured in monetary units
  6. real variables
    variables measured in physical units (bushels of wheat)
  7. classical dichotomy
    theoritical separation of real and nominal units
  8. monetary neutrality
    proposition that changes in the money supply do not affect real variables
  9. velocity of money
    the rate at which money changes hands m*v=p*y
  10. shoe leather cost
    the resources wasted when inflation encouarages people to reduce their money holdings
  11. menu cost
    cost of changing prices
  12. nominal interest
    = real interest + inflation

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