This chapter touches on the topic of inflation. This is pretty appropriate in my opinion because we've just talked about the distribution of money and how the supply can increase or decreased based on different events. Given previous history classes I already associated excess money distribution with rising money levels and ultimately inflation. In this chapter however we learned about inflation in a different matter. The quantity theory of money finally made the idea that more money leads to inflation a real things (or at least a valid thought).
Despite understanding this chapter pretty well, the end kind of tripped me up ( which I suppose is pretty common at this point). I don't quite understand the point of classical dichotomy and why it is so important. I understand what it is, but not so much why it exists. Other than that I do understand monetary neutrality and actually find the idea of velocity of money quite interesting. I would have never guessed that there was an ounce of physics ideology in economics. Regardless it did help understand the concept a little more, as I do better on a more mathematically heavy topic. It also quite interesting that we try to figure out how quickly money will travel through the economy.
Finally I don't quite understand the idea of increasing revenue through inflation tax. Since the price level is increasing wouldn't the money really just be the same unless the government were able to immediately decrease the price level after collecting the tax?
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