Ot Tounsend ¢ seperate meen L_Macre economics ‘ naa HAD Gad ' = v epresate Barna) a Quantiny Theory 2P Money CAD) ' QT Ons gree dtd Ca terse of Monty : 7 @ terest vote o eah adivstroent aaa ; 4 hd mkt fv loanaele Sands = 8 est 1/5 between, money, ences, 2/p | Fishenan poe eee wee eee ee + Q™. exh woetenar | we wei gh —.. main ON & RG ws) 7 wor My = PY cpt ene a) gies slain ame ocksl velocirg turnover fate = a on oS Reigate Has [estore : tonsio9y Jymant dec Bae! ett a cena Ma rete w= PY Heroponsnal vfs benwen Mand P oF M4 by io PPT by iO'ewi ary exogenous monty Supe say, Ae bo O°2S beled in cath t oe saved Vie "Morey tums over rims aoe sores peg embinatons oF Band Y thet Saheb QTM PF ama IF mS s® 300% mvs 300%4 =) 300 was Y 4 cn-400) 200 Bin MOD AD shifts right fuer that v4on-300) 16.4 thonge in M_ is thE ong Y Shafts AD curveThe Classical Theery of WWIEREST RATE On sang chonge inc T ete ere rae equitiocium nreresr rae Funds for Lenaing HH savings s2sCr) + v Jour ne impacr on AD Srapiliting rete Funds borrowed, *Or Ger taanale Fun Firm \ovestmenr T= tC er, 0°) = . a: ete Govr G-T expenditure Cexogenous) L ED at pateneed wy wudgee sell bonds a ee oF bonds Mkt fev loondble funds Supply oF Ionebte Funats S* see) * / Demand for j iboneble Rene T6-D To Stee-7) ' Whet happens if Tq autonomeusiy ? Say, nts 7 Cae LU fom Ip to, due to pustisne ousines forecast (a— BD ot & > Sumrigof LE > Demand for LF => pressure w J Oswingy Do by AL Derrb DL? by be se maealong TCGTD tothe rgatte & a Zcancels out AYs AC TAT feansee pact on ADL -Policuy Implications Fiscal | Policy ‘impacts on (Gated [ones sna aS] eval expansions ith Fiscal Pekin Yen pest {7 vai) {f creat Vas Vena) \ Cisswe bonds) a aris Fiscal Policy Govt issue bend 40 borrow ge to the mer fv Yoonabie Rds / Sw Inihal ond: baloned budget: GT 9 G-Teo at E When @ % demand SLE Cahife to right) Bevo? Df LEDS OF Le > prestune, pushy ® to, seeing Toy Ae Ceorsumenen 4) 4 ss town seatily be Fomt > Td by DY¥2 504 ALT + AG +O cH ey Crate) ct oak prin Ependin G crowds p ofS A BG as no ienpsck on AP!os A. w Parmrone? S. + Labor Supply, NS = 9%) @—____ | « wrpose morg income tox mie Oiaemp fom Fax | | : oct cl From @=T \'\ « realwage after taxi impued yw aw G>T “1 ee) | see Deficit / : '* Labov supply 8 now eee a “ descr og woreving' N= [ (1-49) Goutvonds),samre” | na analysis a5 ‘bebor? aan tax veal wage prvimpecton AD | > noimpact on AS \-PIE govt L mag tax rate from owt on (td) employment T CNS PD AS-AD No Ny, Viens) Vera)| Conclusion | # SelF adjusting tudinciet oP economy 90 need Por c QO intewentions (nonmttwerhonict ) Full employmen sonyee £9? tery a APOE money AUt ilk and rival acme * SUF HME, Mithintioes 0 Impact om equitbsivm of real variables fovteud femptegmanry {intent vats, S| increase in } fo. Y wees ey | dichotomy, bitwtin feos Away determine = nominal and real vaviabus MEd me Feat Raove] ve | money | f, . . vows \ \ caal variables * yell! ay measure tha srominal volt > Y lout no role on vest vat Onecare @ Fesivie gris and money wages xd