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 .
TERMS OF TRADE The relation between the prices of a country's exports and the prices of its imports, represented arithmetically by taking the export index as a percentage of t
USES OF NATIONAL INCOME FIGURES We need national income statistics to measure the size of the "National cake' of goods and services available for competing uses o
analyze the method by which firm can allocate the given advertising budget between different media of advertisement
the benefits of exchange in the light of the law of association, the introduction of money in direct exchange and way income gets distributed among market participants
Consider an economy with three assets and three states. Let be the matrix of asset payoffs at t=1 and p the vector of asset prices at t=0. Assume p 3 =2. a) Does an ar
A MATHEMATICAL APPROACH TO REVENUE AND COST FUNCTIONS Recall that TR = P x Q This implies that P(AR) = TR Q For example, assuming
Prices of the factors of production As the prices of those factors of production used intensively by X producers rise, so do the firms' costs. This cause supply to fall as some
What are the conclusions about the cost of production and efficiency in the long-run equilibrium of a perfectly competitive industry? Three conclusions regarding the cost of pr
Practical Importance of the knowledge of Price Elasticity of demand The practical importance of the measures of elasticity of demand is to be appreciated in various ways:
Arguments against Monopoly However monopolies have been accused of the following weaknesses. Diseconomies of scale While the monopolistic firm ca
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