Recommended
More Related Content
What's hot
What's hot (20)
Viewers also liked
Viewers also liked (18)
Similar to Lecture 17 inflation
More from Gale Pooley
More from Gale Pooley (20)
Recently uploaded
Recently uploaded (20)
Lecture 17 inflation
- 2. Questions
- 4. Inflation Costs shoeleather costs menu costs price variability tax liabilities confusion and inconvenience redistribution of wealth
- 5. Shoeleather Costs trying to spend before prices go up
- 6. Menu Costs constantly changing prices on things
- 7. PriceVariability distorts relative values between things. market cannot allocate as well distorts decisions
- 8. Tax Bracket Creep inflation makes nominal income increase. bump into a higher tax bracket pay more tax with more real income
- 9. Confusion and Inconvenience the length of a ruler changes unit of account bad money
- 10. Redistribution Inflation borrowers gain lenders lose Deflation borrowers lose lenders gain
- 12. Quantity Theory of Money M x V = P x Y M = Money V =Velocity P = Prices Y = Output
- 13. Quantity Theory of Money MV = PY AssumeV is constant then an increase in M will only increase P orY
- 14. Quantity Theory of Money MV = PY Increasing M will either increase prices or output or both
- 15. Quantity Theory of Money 1. V is constant 2. Change M will change P xY 3. Y is a function of capacity 4. If M is increased then P is increased 5. Therefore increasing M will increase inflation
- 17. Inflation Tax When government prints too much money is becomes less valuable. Anyone who has money has lost value
- 18. Real vs. Nominal Real Interest Rate = Nominal Rate - Inflation Rate R = N - I
- 19. Real vs. Nominal Real = Nominal - Inflation Nominal = Real + Inflation Inflation = Nominal - Real
- 20. Indexing Adjusting nominal rate for inflation
- 21. Three Tools of Central Banks Open-Market Operations Discount Rate Reserve Ratio
- 22. Inflation Deflation Winners Borrowers Lenders Losers Lenders Borrowers
- 24. The Macroeconomics of Open Economies
- 25. Key Terms closed economy open economy exports imports net exports trade balance trade surplus trade deficit balanced trade net capital outflow nominal exchange rate appreciation depreciation real exchange rate purchasing power parity
- 27. Global Device
- 28. ARM Holdings Wolfson Marvel Skyworks CSR Linear Technologies NXP National Semiconductor Sharp Samsung Toshiba Infineon Broadcom Numonyx Micron Dialog Semiconductor Texas Instruments STMicroelectronics Silicon Storage RF Microdevices Cirrus Logic U.S. U.K. Germany Korea Japan Taiwan China Saudi Arabia
- 29. 450,000 iPhones and cost about $242,000 to charter, with fuel accounting for more than half the expense. 54 cents or around 2 riyals 44,700 gallons or 170,000 liters
- 31. Global Device Made on Earth
- 34. Trade can make everyone better off
- 35. Free to Trade
- 36. Open Economy An economy that interacts freely with other economies around the world
- 37. Closed Economy An economy that does not interact with other economies around the world