ECON 112 Lecture Notes - Lecture 17: Nominal Interest Rate, Real Interest Rate, Seigniorage
30 Nov 2015
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Wednesday, november 11, 2015. Increase in the overall level of prices. Decrease in the overall level of prices. Extraordinarily high rate of inflation. Prices rose at an average rate of 2. 5% per year i. ii. Prices rose by 7. 8% per year. The price level more than doubled over the decade. International data, 2012, inflation rate. Ii. a. b. c. d. e. f. g. b. i. ii. iii. iv. v. The classical theory of inflation. Classical theory of money a. Explain the long- run determinants of the price level. Explain the inflation rate i. ii. iii. Reflects how much wealth people want to hold in liquid form. Demand curve - downward sloping. Average level of prices in economy. Determined by the fed and the banking system. Supply curve is vertical iii. Overall level of prices adjust. To the level at which the demand for money equals the supply. Level of prices; value of money a.
