TAILIEUCHUNG - Lecture Business economics - Lecture 19: Money and Inflation - I

After completing this chapter, students will be able to: See why inflation results from rapid growth in the money supply, learn the meaning of the classical dichotomy and monetary neutrality, see why some countries print so much money that they experience hyperinflation. | Review of the previous lecture Society faces a short-run tradeoff between unemployment and inflation. If policymakers expand aggregate demand, they can lower unemployment, but only at the cost of higher inflation. If they contract aggregate demand, they can lower inflation, but at the cost of temporarily higher unemployment. The Phillips curve illustrates the short-run relationship between inflation and unemployment. The greater the aggregate demand for goods and services, the greater is the economy’s output, and the higher is the overall price level. A higher level of output results in a lower level of unemployment. Review of the previous lecture The view that unemployment eventually returns to its natural rate, regardless of the rate of inflation, is called the natural-rate hypothesis. To reduce inflation, the Fed has to pursue contractionary monetary policy. To reduce inflation, an economy must endure a period of high unemployment and low output. Lecture 19 Money and Inflation- I .

• Kinh tế học
• Business economics
• Lecture Business economics
• Business applications of economics
• Open economy
• Competitive markets
• Money supply
• Economic Models
• Principles of economics
• Economics of agriculture
• Monopolistic competition
• Macroeconomic policy
• Supply curve
• Elasticity of demand
• Consumer choice
• Competitive firms
• Imperfect competition
• Gross domestic product
• Financial intermediaries
• Productivity growth
• Natural rate of unemployment
• Labor force