Sunday, March 27, 2016

Unit 4 – Money & Banking / Monetary Policy (3-27-16)

Ap Macroeconomics Unit 4 - Relating the Money Mkt., Loanable Funds Mkt., and AD-AS

Part 9

https://www.youtube.com/watch?v=k37Y6BKcpsY&index=8&list=PL2CB281D126F65E26

Overview-
In the comparison of the MMG,LFG, and AD-AS graphs they are very similar to each other. The reason for this is that if one graph's changes or shifts to the left or right then every graph will move to the left or right, this is because MMG shifts due to the gov't increasing money demand, LFG like the MMG shifts right due to an increase of the quantity of the loanable funds, and in the AD-AS graph the AD increases which is also shifting to the right. The changes in the supply of money is also a change in the price of money in each graph which can either shift it left or right. The main thing is the Fisher effect which states that if price increases then the other supply's of money increases or vice versa.

No comments:

Post a Comment