Term
|
Definition
| The rate at which money changes hands. |
|
|
Term
|
Definition
| The equation M x V = P x Y, which relates the quantity of money, the velocity of money, & the dollar value of the economy's output of goods & services. |
|
|
Term
|
Definition
| The theoretical separation of nominal & real variables. |
|
|
Term
|
Definition
| The proposition that changes in the money supply do not affect real variables. |
|
|
Term
|
Definition
| A theory asserting that the quantity of money available determines the price level and that the growth rate in the quantity of money available determines the inflation rate. |
|
|
Term
|
Definition
| Variables measured in physical units. |
|
|
Term
|
Definition
| The costs of changing prices. |
|
|
Term
|
Definition
| Variables measured in monetary units. |
|
|
Term
|
Definition
| The one-for-one adjustment of the nominal interest rate to the inflation rate. |
|
|
Term
|
Definition
| The resources wasted when inflation encourages people to reduce their money holdings. |
|
|
Term
|
Definition
| The revenue the government raises by creating money. |
|
|
