Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Milton Friedman makes the demand for money a function of the real per capital permanent income. in this study the demand function for money is stated as;M/NPP= r( YP/NP) δ
Where:
M = nominal stock of money N = population Yp = permanent income Pp = permanent prices
This latter version of the demand for money is not as different from the first version as it appears to be because the concept of permanent income is broad enough to include several variables used in the earlier version of the demand for money . permanent income is affected by yield on securities and human and non human wealth holdings.
According to Milton Friedman, on the basis of empirical evidence the demand for nominal cash balance is represented by the following equation.
M =(0.00323)(Yp/N)1.81 (NPp)
Where all the variables have the same definition as stated above except ,Yp which stands for the real permanent income . in the above form the equation expresses that ( assuming population and permanent prices to be constant ) a 1 per cent increase in real permanent income increase the de4mand for the nominal cash balances by 1.81 per cent. In other words, the Friedman equation for the demand for money indicates that the real permanent income elasticity for the demand for nominal cash balances is 1.81. according to Friedman the causal relationship runs from change in the money supply to change in income .
(a) Describe how commercial banks determine their output, interest rates and profit levels assuming they act as oligopolies. (b) To what extent is the above statement a reality
Structural Unemployment The decline of the highly localized industry due to international trade causes great problems of regional (structural) unemployment. If it would take
a. Explain why the demand for a particular brand is more elastic than the demand for all cigarettes. If Lucky Strike raised its price by 1% in 1918, was the price elast
CENTRAL BANK A modern central bank performs so many functions of different nature that it is difficult to give any brief yet accurate definition of a central bank. Any definiti
Why does the demand curve slope downwards? As Figure above demonstrates, demand curve slopes downward to the right. Downward slope of the demand curve reads the law of demand i
Income Elasticity of different consumer goods Commodities Coefficient of income elasticity Impact on expenditure Necessities
Bank of Central Clearance ,Settlement and Transfer This function was first developed by the bank of England toward the middle of the nineteenth century. In 1954, a scheme was
Q. What is External Diseconomies? The expansion of an industry is likely to generate external diseconomies that raise the cost of production. An increase in the size of industr
Suppose the consumer can choose either coffee shop 1 or coffee shop 2, but not both. - Assuming that other things (such as location, quality of coffee, and so on) are the same,
Economics is generally defined as the problem of how best to allocate limited resources, limited because needs are characterized as unlimited, but common sense tells us that rather
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd