International Economics
Course 4 18-9-2018 Jurne Sleddens
History of Money
Money as we know it evolved as follows:
Commodity money
o Mostly old & silver
Commodity backed money
o Bills that are convertile into (mostly) gold and silver
Fiat money
o Value is derived from its ofcial status as a means of exchange iy means of
government fatt rather than precious metals.
Inflation, disinflation, deflation
Infaton
Increase in aggregate price level
Defaton
Decrease in aggregate price level
Disinfaton
Decrease in acceleraton of infaton
Consumer Price Index (CPI)
Infaton, disinfaton and defaton are measured by an inde ( bwe call it the CPI) which keeps track on
the price development of a basket of service and goods.
Its base value is 100, a CPI of 124 means 24% infaton relatve to the base year. CPI of 50 means a
defaton of 50%.
Course 4 18-9-2018 Jurne Sleddens
History of Money
Money as we know it evolved as follows:
Commodity money
o Mostly old & silver
Commodity backed money
o Bills that are convertile into (mostly) gold and silver
Fiat money
o Value is derived from its ofcial status as a means of exchange iy means of
government fatt rather than precious metals.
Inflation, disinflation, deflation
Infaton
Increase in aggregate price level
Defaton
Decrease in aggregate price level
Disinfaton
Decrease in acceleraton of infaton
Consumer Price Index (CPI)
Infaton, disinfaton and defaton are measured by an inde ( bwe call it the CPI) which keeps track on
the price development of a basket of service and goods.
Its base value is 100, a CPI of 124 means 24% infaton relatve to the base year. CPI of 50 means a
defaton of 50%.
