Questions

What is the relationship between real money demand and the nominal interest rate? Based on this relationship, what would you expect the result would be if ATM machines were introduced to an economy?

If prices are rising in an absolute sense, then why should we analyze them relative to (i) prices of individual goods and services, and (ii) wages?

What false conclusion is made from Hume's Angel Gabriel fable and Friedman's Helicopter story?

Define: Inflation as a tax. Who benefits from inflation?

Define: Shoeleather costs and menu costs. What are the other costs to expected inflation discussed in class today? How would you rank them in terms of importance?

Some economic historians have noted that during the period of the gold standard, gold discoveries were most likely to occur after a long deflation. (The discoveries of 1896 are an example.) Why might this be true?

Why would an increase in the price of oil not in itself cause general prices to rise?