Professional Documents
Culture Documents
Introduction To Economics
Introduction To Economics
Introduction To Economics
Introduction to
Economics
Topic 16: The Impact of Money
Source: LR12, LR11, Chapter 28; Chapter 29 to pg 705, skim the
rest; LR10, Chapter 27; skim rest of Chapter 28.
References to open economy and exchange rates
will come later; focus on short run only.
M
r
r*
Quantity of Money
L, M
L = Lt + Lp + Ls
L = L(Y, r)
L, M
AE shifts up AE1