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5 Cards in this Set
- Front
- Back
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Equation of Exchange/ Fisher Equation |
MV=PT M- Money supply V- Velocity of exchange P- Average price level T- Number of transactions over time |
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Monetarism
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The theory that inflation is always everywhere and is caused by excessive increases in the money supply. |
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Monetary Transmission Mechanism
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The mechanism in which an increase in the money supply leads to a change in national income and other variables such as unemployment. |
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The Quantity Theory of Money
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The theory, based on the equation of exchange, that the increase in money supply (M) will lead to increases in the price level, P.
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The Velocity of Circulation
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The number of times that the stock of money within an economy changes hands over a period of time.
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