Lecture: October 7: Optional: The Money Market and the LM Curve

• Optional: The money market and the LM curve
  • The money market and the money stock
    • Wealth, bonds, and the demand for money
    • Money supply
    • Money supply and money demand
      • Liquidity preference and the quantity theory of money: what's the relation? 8 Bond prices and interest rates
  • The LM curve
    • Interest rates and the LM curve
    • Drawing the LM curve
    • When is the LM curve relevant
      • When central banks are passive--or target money stocks
      • When the supply of money is given--as under a gold standard
  • The IS-LM framework
    • IS-LM equilibrium
    • IS shocks
    • LM shocks
    • Classifying disturbances
• Optional: Aggregate supply and aggregate demand
  • The price level and aggregate demand
  • The price level and aggregate supply
  • Prices: stuck? sticky? flexible?
  • The AS-AD diagram
    • Understanding demand and supply shocks