Macro 10

2. Lecture 8
Macroeconomics

3. Opening
Prayer

4. Quiz Master

5. My dentist’s reception desk
is manned by a woman in the
Philippines on video.
When you walk in, an iMac is
facing you with her on
camera to check you in.
Owner said he struggled
with high turnover and bad
employees. Philippines
woman has been
fl
awless by
comparison.

6. Ef
fi
ciency Wages
Employee Wage Pizzas Productivity
Wage per Pizza
Bob $10 5 $2.00
Bill $20 12 $1.67

7. Ef
fi
ciency Wages
More Healthy
Lower Turnover
Higher Quality
More Effort

8. Chapter 12
In
fl
ation and the
Quantity Theory of
Money

9. Two Macro Headaches
Unemployment
In
fl
ation

10. Good Money
Bad Money

11. 100+ Currencies

24. The Two Problems of
Macroeconomics
Unemployment
In
fl
ation

25. one
unit
of
this
will buy ___ units of that

26. What is Money?
Trust

29. 2. Zimbabwe, Nov. 2008
Highest monthly in
fl
ation: 79,600,000,000%
Prices doubled every: 24.7 hours

34. If money loses trust
It loses its value

40. When you have lines waiting to buy your product, you can do
two things:
make more, or raise prices

44. Prices
Current
Constant

45. In
fl
ation
Cause:
Printing money faster than
making goods and services
Effect:
Rising prices

46. Nominal
vs.
Real

47. P2 - P1
P1
In
fl
ation Rate

48. Price Level
Average of
prices

49. In
fl
ation Indexes
GDP
De
fl
ator

50. Quantity Theory of Money
M = Money Supply
v = velocity
P = Price Level
YR = Real GDP

51. v = velocity
The average number of times
a dollar is used to purchase
fi
nal goods and services
within a year

52. How many times
it gets traded

53. Mv = PYR
Assume v andYR are
constant
M = P

54. M = P
In
fl
ation is
everywhere and
always a monetary
phenomenon
Milton Friedman