Page 143 - DECO402_Macro Economics

Macroeconomic Theory

Notes 15.4 Summary
y Friedman presents Quantity Theory in the form of Demand of Money Theory and considers
demand of money on assets prices or respective return and wealth or income. He shows that
how demand of money becomes the theory of prices and production. The difference in nominal
quantity of demanded money and nominal quantity of supplied money will be shown in the
tried expense mainly. When the demand of money is changed in reaction of changes in it’s
determiners, then in the resulting of it the sufficient change in prices or nominal incomes occurs
because of changes in supply money always approximately.

15.5 Keywords

y Constraints – Regulator.
y Capitalized – With Capital.

15.6 Review Questions

1. What do you understand by Friedman’s Theory?
2. Interpret the Empirical Evidence of Friedman’s Theory of Money.
3. Write the comment on ‘Friedman Vs Keynes’.

Answer:s Self Assessment
1. capital 2. Asset Theory 3. (a) 4. (b)
5. (a) 6. (b) 7. True 8. True
9. False 10. False

15.7 Further Readings

Books 1. Macroeconomics— S. K. Chakravarti, Himalaya Publishing House, 2010.
2. Macroeconomics: Economic Growth, Fluctuations and Policy— Robert
E Hall and David H. Paipel, Vaina Books, 2010.
3. Macroeconomics: Theory and Policy— H. L. Ahuja, S. Chand Publisher,
2010.
4. Necessity of Macroeconomics: H. S. Nath, Cyber Tech Publication, 2012.

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