Money Growth and Inflation- Macro Topic 5.3

Money Growth and Inflation- Macro Topic 5.3

Assessment

Interactive Video

Business, Life Skills

11th Grade - University

Hard

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Jacob Clifford explains the two key graphs in macroeconomics: the money market graph and the loanable funds market graph. The money market graph focuses on short-run decision-making, showing how changes in the money supply affect nominal interest rates and GDP. The loanable funds market graph, on the other hand, deals with long-run decision-making, illustrating the supply and demand for loans and the real interest rate. The video also covers the Fisher Effect and the concept of the natural rate of interest, providing a comprehensive understanding of how these graphs interact and their implications in economic theory.

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7 questions

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1.

OPEN ENDED QUESTION

3 mins • 1 pt

What are the two graphs discussed in the video and what do they represent?

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2.

OPEN ENDED QUESTION

3 mins • 1 pt

Explain the difference between nominal interest rates and real interest rates.

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3.

OPEN ENDED QUESTION

3 mins • 1 pt

What is the quantity theory of money and how does it relate to GDP and inflation?

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4.

OPEN ENDED QUESTION

3 mins • 1 pt

How does an increase in the money supply affect nominal interest rates in the short run?

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5.

OPEN ENDED QUESTION

3 mins • 1 pt

What happens to the equilibrium nominal interest rate when expected inflation changes?

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6.

OPEN ENDED QUESTION

3 mins • 1 pt

Describe the Fisher Effect and its significance in the context of loanable funds.

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7.

OPEN ENDED QUESTION

3 mins • 1 pt

Discuss the concept of the natural rate of interest and its relevance in macroeconomic theory.

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