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A REVIEW AND EXTENSION OF BASIC
The Monetary Sector
The Interaction of the Money and Expenditure
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aggregate demand analysis assets assume balance of payments balance-of-payments bank deposits Bank of England behaviour bonds borrowers capital changes coefficient costs countries country's currency curve demand for cash demand for money determined devaluation domestic economy elasticity encashments equation equilibrium example excess demand exchange rate exports factors Figure finance foreign exchange foreign exchange market Friedman full employment gold holding imports increase inflation influence interest rates investment Keynes Keynesian labour liquidity liquidity trap LM schedule loans medium of exchange monetary authorities monetary base monetary policy money balances money illusion money market money stock money supply nominal output panel period Phillips curve portfolio position price level production quantity of money rate of interest real balance effect real income relationship relative prices reserve currency reserve ratio rise SDRs sector speculative supply of money target theory trade transactions balances transmission mechanism Treasury Bills unchanged wealth effect