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The theory proposed by the
classical economists in which real money balances demanded bore a stable, proportionate
relationship to total transactions and to aggregate income.
The response of expenditures
to changes in the interest rate.
Gross national product in
current dollars divided by the money supply.
Ideas central to the
monetarist position in economics. They include: (1) real disturbances have
little effect on aggregate price and output equilibriums; (2) a fixed rate
of money supply growth produces an acceptable price and output result in
ordinary circumstances; and (3) fiscal policies have little effect on price
and output equilibriums.
The responsiveness of real
money balances demanded to changes in the interest rate.
The situation where the
interest rate needed for a full-employment aggregate expenditure is
negative.
The condition which exists
when prices and money wages are free to respond to market forces.
A model that conceptualizes
the forces influencing aggregate money expenditures in terms of the factors
affecting the demand for money and the money supply.
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