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17 Cards in this Set

  • Front
  • Back
Resources wasted when inflation causes people to economize on money holdings
shoeleather costs
the practice of a government reaising revenue by printing money
inflation tax
the theory that the quantity of money determines prices and the growth rate of money determines inflation
quantity theory of money
variables measured in physical units
real variables
the costs associated with changing prices
menu costs
interest rate uncorrected for inflation
nominal intrest rate
profits made from selling an asset for greater than the purchase price
capital gains
the one to one adjustment of the nominal interest rate to inflation
fisher effect
an increase in the overall level of prices
extraordinarily high inflation
quantity equatoin
the theoretical separation of nominal and real variables
classical dichotomy
interest rate corrected for inflation
real interest rate
variables measured in monetary units
nominal variables
rate at which money circulates
velocity of money
a decrease in the overall level of prices
the property that changes in the money supply affect nominal variables but not real variables
monetary neutrality