Theory of Employment, Output, Inflation, Money and Finance-Classical Theory on Money (IEcoS (Economic Services) Economics Paper-2): Questions 1 - 2 of 2

Access detailed explanations (illustrated with images and videos) to 82 questions. Access all new questions we will add tracking exam-pattern and syllabus changes. Subscription can be renewed yearly absolutely FREE! View Sample Explanation or View Features.

Rs. 300.00 or

How to register?

Question number: 1

» Theory of Employment, Output, Inflation, Money and Finance » Classical Theory on Money » Neutrality of Money

Edit

Appeared in Year: 2018

Essay Question▾

Describe in Detail

Explain the neutrality of money.

Explanation

The neutrality of money is an economic theory which states that changes in the money supply only affect nominal variables and not the real variables.

  • In other words, an increase or decrease in the money supply can change the price level but not the output of the economy.

  • According to classical theory, the nominal variables move in proport

… (317 more words) …

Question number: 2

» Theory of Employment, Output, Inflation, Money and Finance » Classical Theory on Money » Neutrality of Money

Edit

Appeared in Year: 2016

Essay Question▾

Describe in Detail

Distinguish between inside and outside money.

Explanation

  • Inside money is created inside the private sector. It is mainly used to identify debt which is considered as an asset to the holder but a liability to other such as the debt issuer.

    Inside money includes bank deposits that exist as a result of the loan creation process. It is the dominant form of money in the modern economy and as the economy

… (105 more words) …

Developed by: