tailieunhanh - Ebook Macroeconomics (10th edition): Part 2
(BQ) Part 2 book "Macroeconomics" has contents: Money, the price level, and inflation; the exchange rate and the balance of payments; aggregate supply and aggregate demand; expenditure multipliers - The keynesian model; fiscal policy, international trade policy,.and other contents. | To download more slides, ebooks, solution manual, and test bank, visit After studying this chapter, you will be able to: ᭜ Define money and describe its functions ᭜ Explain the economic functions of banks and other depository institutions ᭜ Describe the structure and functions of the Federal Reserve System (the Fed) ᭜ Explain how the banking system creates money ᭜ Explain what determines the demand for money, the supply of money, and the nominal interest rate ᭜ Explain how the quantity of money influences the price level and the inflation rate in the long run 8 M oney, like fire and the wheel, has been around for a long time, and it has taken many forms. Money was wampum (beads made from shells) for North American Indians, whale’s teeth for Fijians, and tobacco for early American colonists. Cakes of salt served as money in Ethiopia and Tibet. Today, when we want to buy something, we use coins or dollar bills, write a check, or swipe a debit card or a credit card. Soon, we’ll be using a “smart card” or even a cell phone to make payments. Are all these things money? The quantity of money in our economy is regulated by the Federal Reserve— the Fed. How does the Fed influence the quantity of money? And what happens if the Fed creates too much money or too little money? In this chapter, we study the functions of money, the banks that create it, the Federal Reserve and its influence on the quantity of money, and the long-run consequences of changes in the quantity of money. In Reading Between the Lines at the end of the chapter, we look at the extraordinary actions taken by the Fed during the recent financial crisis. MONEY, THE PRICE LEVEL, AND INFLATION 183 To download more slides, ebooks, solution manual, and test bank, visit 184 CHAPTER 8 Money, the Price Level, and Inflation ◆ What Is Money? What do wampum, tobacco, and nickels and dimes have in common? They are all examples of money, which
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