Chapter 14 Money. Interest Rates, and Exchange rates
Chapter 14 ▪ Money,Interest Rates,and Exchange rates
Chapter organization Introduction Money Defined: A Brief Review The Demand for Money by Individuals ggregate Money Demand The Equilibrium Interest Rate: The Interaction of Money Supply and demand Copyright C 2003 Pearson Education, Inc Slide 14-2
Copyright © 2003 Pearson Education, Inc. Slide 14-2 ▪ Introduction ▪ Money Defined: A Brief Review ▪ The Demand for Money by Individuals ▪ Aggregate Money Demand ▪ The Equilibrium Interest Rate: The Interaction of Money Supply and Demand Chapter Organization
Chapter organization The Money Supply and the exchange rate in the Short run Money, the Price Level, and the Exchange Rate in the ong Run Inflation and Exchange Rate dynamics Summary Copyright C 2003 Pearson Education, Inc Slide 14-3
Copyright © 2003 Pearson Education, Inc. Slide 14-3 ▪ The Money Supply and the Exchange Rate in the Short Run ▪ Money, the Price Level, and the Exchange Rate in the Long Run ▪ Inflation and Exchange Rate Dynamics ▪ Summary Chapter Organization
Introduction Factors that affect a country' s money supply or demand are among the most powerful determinants of its currency's exchange rate against foreign currencies a This chapter combines the foreign-exchange market with the money market to determine the exchange rate in the short run It analyzes the long-term effects of monetary changes on output prices and expected future exchange rates Copyright C 2003 Pearson Education, Inc Slide 14-4
Copyright © 2003 Pearson Education, Inc. Slide 14-4 Introduction ▪ Factors that affect a country’s money supply or demand are among the most powerful determinants of its currency’s exchange rate against foreign currencies. ▪ This chapter combines the foreign-exchange market with the money market to determine the exchange rate in the short run. • It analyzes the long-term effects of monetary changes on output prices and expected future exchange rates
Money Defined: A Brief Review Money as a Medium of Exchange a generally accepted means of payment a money as a Unit of Account a widely recognized measure of value Money as a Store of value A transfer of purchasing power from the present into the future Copyright C 2003 Pearson Education, Inc Slide 14-5
Copyright © 2003 Pearson Education, Inc. Slide 14-5 Money Defined: A Brief Review ▪ Money as a Medium of Exchange • A generally accepted means of payment ▪ Money as a Unit of Account • A widely recognized measure of value ▪ Money as a Store of Value • A transfer of purchasing power from the present into the future