经济学原理第30章.pptVIP

* Students seem to readily understand that the real wage is the purchasing power of the wage, or that the real wage is corrected for inflation. From either of these interpretations of the real wage, it is just a small step to understand that the real wage is measured in units of output. What does “the purchasing power of the wage” mean? If students think about it, they will grasp that it means the quantity of output workers can buy with their wage. Hence, the real wage is measured in units of output. What does “corrected for inflation” mean? A simple example helps. Suppose the nominal wage rises 20% and the price level also rises 20%. Students will immediately understand that the wage – corrected for inflation – is unchanged. Which is to say, it can buy the same quantity of output as before. The next slide discusses relative prices, demonstrating that they, too, are measured in physical units, which makes them real variables. The following slide returns to the real wage, showing that it is a relative price, and demonstrating that it is measured in units of output. How is it that the real interest rate is measured in output? Suppose we measure the value of a deposit in terms of how much output the deposit can buy (i.e., the purchasing power of the deposit). Then, think of the real interest rate as the rate at which the purchasing power of the deposit grows. Thinking in these terms, students should begin to grasp that the real interest rate is the amount of output earned on the deposit (as a % of the deposit). * This result is important because relative prices, not nominal prices, determine the economy’s allocation of resources. * The material on this slide does not appear explicitly in this chapter, but it helps explain how money can be neutral. * The textbook’s definition of velocity appears on this slide. You may prefer a more precise definition: The number of transactions in which the average dollar is used. The following slide provi