Monetary theory:

abscissa adjustment analysis assumed assumption balance of payments capital stock cash balances central bank chapter commodity cost of holding countries credit expansion currency curve deficit financing deflation demand for money devaluation diagram disequilibrium domestic assets equation excess demand excess supply exchange rate expectations Figure function given rate gold exchange standard growth rate hoarding holding money implies increase inflation rate intersection investment level of real lower monetary expansion money rate money supply money-capital ratio nominal nominal interest rate output payments deficit percent point Q position price level price of gold problem productivity of capital quantity of money rate of growth rate of inflation rate of interest rate of monetary real balances real interest rate real money balances real rate real value reduced reserve ratio result rise seigniorage shift slope stock of real stocks and flows theory U.S. balance velocity wealth effect world economy zero