曼昆《经济学原理》(宏观经济学分册)英文原版PPT课件 23.pptVIP

* Bullet 2: Mankiw has removed the word, “directly” * * * * * * * * * * * * Align text for second bullet. * When banks loan out their deposits, they increase the quantity of money in the economy. Because the Fed cannot control the amount bankers choose to lend or the amount households choose to deposit in banks, the Fed’s control of the money supply is imperfect. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Money Supply, Money Demand, and Monetary Equilibrium People hold money because it is the medium of exchange. The amount of money people choose to hold depends on the prices of goods and services. In the long run, the overall level of prices adjusts to the level at which the demand for money equals the supply. Figure 1 How the Supply and Demand for Money Determine the Equilibrium Price Level Quantity of Money Value of Money, 1 / P Price Level, P Quantity fixed by the Fed Money supply 0 1 (Low) (High) (High) (Low) 1 / 2 1 / 4 3 / 4 1 1.33 2 4 Equilibrium value of money Equilibrium price level Money demand A Figure 2 An Increase in the Money Supply Quantity of Money Value of Money, 1 / P Price Level, P Money demand 0 1 (Low) (High) (High) (Low) 1 / 2 1 / 4 3 / 4 1 1.33 2 4 M1 MS1 M2 MS2 2. . . . decreases the value of money y . . . 3. . . . and increases the price level. 1. An increase in the money supply . . . A B The Effects of a Monetary Injection The Quantity Theory of Money How the price level is determined and why it might change over time is called the quantity theory of money. The quantity of money available in the economy determines the value of money. The primary cause of inflation is the growth in the quantity of money. The Classical Dichotomy and Monetary Neutrality Nominal variables are variables measured in monetary units. Real variables are variables measured in physical units. The Classical Dichotomy and Monetary Neutrality According to Hume and others, real economic variables do not change with changes in the money suppl