This document discusses macroeconomics and the monetary system. It covers inflation, its causes when money supply increases faster than goods and services, and its effects of increasing the overall price level and prices. Price changes from shifts in supply and demand are also mentioned. An example is given of extremely high inflation in Zimbabwe in 2008, when prices doubled every 24.7 hours and the monthly inflation rate was over 79 billion percent.

1. Macroeconomics
Lecture 16
The Monetary System

2. Questions

3. Exam Review

4. Inflation
cause
effect

5. Cause
Money supply
increasing faster
than goods and
services

6. Effect
increasing price
level
all prices increase

7. Price Changes
changes in
supply and
demand

8. Zimbabwe, Nov. 2008 Highest monthly inflation: 79,600,000,000%
Prices doubled every: 24.7 hours