Discussion Post: Money and Economic Volatility
• We generally expect the rate of inflation to be reflected in interest rates. With this in mind discuss the difference between the effects of anticipated and unanticipated inflation on the rate of interest and also make sure that you discuss the wealth distribution implications these.
• The so-called quantity theory of money suggests that the amount of money in circulation is the primary determinant of the price level in the economy and that the growth rate of the money supply is the primary determinant of the inflation rate. This idea is based on a series of implicit arguments. Identify what these are and also evaluate the logic of the arguments that the quantity theory is based on.
The response should include a reference list. Using double-space, Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.