经济学概论第2章 货币增长与通货膨胀.ppt

* Some students may think that money demand is negatively related to P, reasoning that an increase in P reduces the demand for goods and services, so less money is required to buy goods services. However, the relationship between P and money demand holds real income constant. Thus, “other things equal” means that an increase in P does NOT reduce real income, and therefore does not reduce the demand for goods and services. Here’s a handy way to explain it: Real income determines the quantity of gs people demand. P determines how many dollars will be needed to buy this quantity of gs. * Students seem to readily understand that the real wage is the purchasing power of the wage, or that the real wage is corrected for inflation. From either of these interpretations of the real wage, it is just a small step to understand that the real wage is measured in units of output. What does “the purchasing power of the wage” mean? If students think about it, they will grasp that it means the quantity of output workers can buy with their wage. Hence, the real wage is measured in units of output. What does “corrected for inflation” mean? A simple example helps. Suppose the nominal wage rises 20% and the price level also rises 20%. Students will immediately understand that the wage – corrected for inflation – is unchanged. Which is to say, it can buy the same quantity of output as before. The next slide discusses relative prices, demonstrating that they, too, are measured in physical units, which makes them real variables. The following slide returns to the real wage, showing that it is a relative price, and demonstrating that it is measured in units of output. How is it that the real interest rate is measured in output? Suppose we measure the value of a deposit in terms of how much output the deposit can buy (i.e., the purchasing power of the deposit). Then, think of the real interest rate as the rate at which the purchasing power of the deposit grows.