Matching: Match the Key terms in Column "A" with the definitions in Column "B" by writing the block letter of yourchoice from Column"B" in the space provided under "A" and match the definitions in column "B" with the meanings or formulas or examples orfacts in column "C" by writing the lower letter case of your choice in the space provided under column "B". I only questions #1, 3, 5, 7 & 9. Thank you.

Chapter 14 Money and The Economy: Pre-Class & In-Class Activities Packet Name/ I.D. Number: Section: Date: Part 2. Matching: Match the Key terms in Column "A" with the definitions in Column "B" by writing the block letter of your choice from Column "B" in the space provided under "A" and match the definitions in column "B" with the meanings or formulas or examples or facts in column "C" by writing the lower letter case of your choice in the space provided under column "B". Column "A" Column "B" Column "C" 1. Equation of A. The theory assuming that velocity (V) and a. Equal to Nominal GDP (PQ)/Money supply(M2). Real GDP (Q) are constant and predicting that b. Also known as the "Fisher effect", named after Irving Fisher Exchange changes in the money supply (M) lead to strictly AMT (Money SS) => Expected Inflation Rate = 1DD for LF & JSS 2. Velocity proportional changes in the price level (P). of LF => Al 1 1 (Interest Rate) 3. Simple Quantity B. A continued increase in the price level. C . Year-to-year or Back-to-back increase in the price level for 2 or more C. The change in the interest rate due to a consecutive years due to demand-side(demand-pull:tin Aggregate Theory of change in Real GDP DD for G&S) or supply side (cost- push: tin the cost of prod'n) Money D. The change in the interest rate due to a factors. change in the expected inflation rate. d. Changes in the money supply that affects interest rate by way of 4. One-Shot E. An identity stating that the money supply (M) changes in the loanable funds (LF). Inflation times velocity (V) must be equal to the price AMt (Money SS) -> ATSLF(SS of LF) >> All ( Interest rate) level (P) times Real GDP(Q) ; MV = PQ 5. Continued F. The change in the interest rate due to a e. It is an identity not a theory. It is a Truism, i.e., 2 + 2 = 4 change in the supply of loanable funds. The rate quoted on newspapers or on web pages for loans and Inflation deposits by commercial banks and other depository institutions. 6. Liquidity Effect G. The change in the interest rate due to a 9. Changes in the money supply that affect the interest rate by way of changes in the price level. 7. Income Effect change in the price level. 8. Price-Level H. The interest rate actually charged (or paid) in AM1 (Money SS) - (DD for LF => AtP(Price Level) => Ati(Interest Rate) the market; the market interest rate: Nominal h. One time increase in the price level, say, from 100 this year Effect interest rate = Real interest rate + Expected inflation rate to 105 in the following year due to demand or supply side factors. 9. Expectations I. A one-time increase in the price level; an i. The theory that asserts, when the money supply increases (decreases) Effect increase in the price level that does not by 5%, the price level goes up(down) by 5%. continue. j. Changes in the money supply that affect the interest rate by way of 10. Nominal Interest J. The average number of times a dollar is spent changes in Real GDP AM1 (Money SS) => AT DD for LF>ASS of LF1= Q 1 (Real GDP) Rate to buy final goods and services in a year. Ait (Interest Rate) 3