Macroeconomics

592 |

I N D E X

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Martin, William McChesney, 445

Marx, Karl, 49, 226

Mauro, Paul, 234n

Mayan civilization, 217

McCallum, Bennett T., 254n

McDonald’s, Big Mac prices and,

147–149, 148t

McKinley, William,  104–105

Medicaid, 471

Medicare, 471

Medium of exchange, money as, 81

Menu cost of inflation, 102

Metrick, Andrew, 521n

Mexico

Big Mac price and exchange rate in,

148t

exchange rate in, 148–149

inflation in, 144, 145f

investment rate in, 202f

NAFTA and, 359

standard of living in, 192t

threatened default of, 488

Meyer, Bruce D., 169n

Microeconomics, definition of 13

Minimum-wage laws, 170–172

Mint Act of 1792, 94

Miron, Jeffrey A., 31n, 459n

Mishkin, Frederic S., 458

M1 money measure, 86, 557, 558,

563–564

M2 money measure, 86, 558, 563–564

M3 money measure, 86

Model(s), 8. See also Economic models;

specific models

Model of aggregate supply and aggre-

gate demand, 268–269. See also

Aggregate demand (AD);

Aggregate supply (AS)

Modigliani, Franco, 14, 499–500,

509–510, 512

Moffitt, Robert, 179n

Monetarists, 457

Monetary aggregates, 86, 557–558

demise of, 563–564

Monetary base, 551

Monetary contraction, in France,

276–277

Monetary neutrality, 112, 265

Monetary policy, 83–84

AD-AS model and, 429–432, 430f,

431f, 432–438

analysis with macroeconomic models,

317–318, 318t

budget deficit and, 486–487

to curb inflation, 393

fixed exchange rates and, 352–354,

353f

floating exchange rates and, 347f,

347–348

instruments of, 552–553

interaction with fiscal policy, 315,

316f, 317

interest rates and, 303–304

large open economies and, 376f,

376–377

liquidity trap and, 334

LM curve and, 303–304, 305, 306f,

313–315, 314f

rules for, 457

short-run equilibrium and, 313–315,

314f

tools of, 320–321

Monetary-policy rule, AD-AS model

and, 414–415

Monetary transmission mechanism, 315

Monetary unions, 362–363

Money, 80–86

commodity, 81

cost of holding, 98

definition of, 80

demand for. See Money demand

fiat, 81, 82–83

future, current prices and, 98–100, 99f

gold standard and, 81

high-powered, 551

near, 563

in POW camps, 82

purposes of, 80–81

quantity theory of, 86–92

seigniorage and, 92–94

supply of. See Money supply

velocity of. See Velocity of money

on Yap island, 83

Money demand, 556–564

Baumol-Tobin model of cash man-

agement and, 559f, 559–562,

561f

empirical studies of, 562–563

financial innovation, near money, and

demise of monetary aggregates

and, 563–564

LM curve and, 304–305, 305f

nominal interest rate and, 98–100

portfolio theories of, 557–558

transactions theories of, 558–559

Money demand function, 88–89

Money hypothesis, 328–331

Money market, LM* curve and, 343,

344f

Money multiplier, 551

Money supply, 89, 547–556

bank capital, leverage, and capital

requirements and, 555–556

bank failures and, 553–554, 554t

control of, 320–321. See also

Monetary policy

definition of, 83

fractional-reserve banking and,

549–550

inflation and growth of, 90–92, 91f,

92f

measurement of, 84–86, 85t

model of, 550–552

monetary policy instruments and,

552–553

100-percent-reserve banking and, 548