ON DEFINITION OF MONEY MARKET FUNCTIONING MECHANISM IN AGGREGATE SUPPLY AND DEMAND MODEL


Melkumyan V. M.

The definition of money market functioning mechanism within the aggregate supply and demand model (AD-AS model) is under discussion. The author proves that there exist some incorrect assumptions in definition of interrelation forms between aggregate demand and interest rate in AD-AS model. He also opposes this definition to the statements concerning definition of interrelation forms for money market variables in Marx’s theory. Keywords: macroeconomic equilibrium, aggregate demand, aggregate supply, overall price level, money supply, interest rates.

Viktor M. Melkumyan, candidate of Economics, associate professor of Moscow City Teacher Training University, associate professor of National Research Nuclear University MEPhI, Moscow.


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