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