LECTURE NOTES FOR CHAPTER 14

PART ONE


FIGURE L14-1

 

 

 

 

 

 

 


FIGURE L14-2

 

 

 

 

 

 

 

 


TABLE L14-1

 

 

 

 

 

 

MD = g (rN, Y, P, ...)

The quantity of money demanded depends on these factors.

 

 

 

 

 

 

 

M = Nominal Money Balances

This is money measured in terms of current dollars.

= Real Money Balances

This is money measured in terms of constant, base year dollars. Or money corrected for price level changes.

 

 

 

 

 


FIGURE L14-3

 

 

 

 

 

 


FIGURE L14-4

 

 

 

 

 

 

 


FIGURE L14-5

Liquidity Preference vs. Loanable Funds

 

 

 

 

Recall:

If all price level changes are assumed to be surprises

= 0

In that case

and we don't have to worry about which rate of interest we are referring to. Simply call it r.

 

 

 

 

 

 


FIGURE L14-6

 

 

 

 

 

 

 

 

 

 

 

 


FIGURE L14-7