CHAPTER FOUR Money and Inflation macroeconomics N.Gregory Mankiw College of Management,HUST
macroeconomics N. Gregory Mankiw macro College of Management, HUST CHAPTER FOUR Money and Inflation
In this chapter you will learn -The classical theory of inflation causes effects social costs "Classical"-assumes prices are flexible markets clear. Applies to the long run. CHAPTER 7 Money and Inflation slide 1
CHAPTER 7 Money and Inflation slide 1 In this chapter you will learn ▪ The classical theory of inflation – causes – effects – social costs ▪ “Classical” - assumes prices are flexible & markets clear. ▪ Applies to the long run
Content 1.Money and money supply 2.The quantity theory of money 3.The Fisher effect 4.The money demand function 5.The social costs of inflation 6.Hyperinflation 7.The Classical Dichotomy 8.Chapter summary CHAPTER 7 Money and Inflation slide 2
CHAPTER 7 Money and Inflation slide 2 Content 1. Money and money supply 2. The quantity theory of money 3. The Fisher effect 4. The money demand function 5. The social costs of inflation 6. Hyperinflation 7. The Classical Dichotomy 8. Chapter summary
1 Money:definition Money is the stock of assets that can be @ AL11695679A readily used to make transactions. CHAPTER 7 Money and Inflation slide 3
CHAPTER 7 Money and Inflation slide 3 Money: definition Money is the stock of assets that can be readily used to make transactions. 1
Money:functions 1. medium of exchange we use it to buy stuff 2.store of value transfers purchasing power from the present to the future 3.unit of account the common unit by which everyone measures prices and values CHAPTER 7 Money and Inflation slide 4
CHAPTER 7 Money and Inflation slide 4 Money: functions 1. medium of exchange we use it to buy stuff 2. store of value transfers purchasing power from the present to the future 3. unit of account the common unit by which everyone measures prices and values 1