Gibson's paradox is the fact that while the gold standard was in force, this value was positivelycorrelated with the wholesale price level rather than inflation.
Gibson's paradox is the fact that while the gold standard was in force, this value was positivelycorrelated with the wholesale price level rather than inflation. The Mundell-Fleming model shows that theglobal version raises the local version. It is the dependent variable for the LM curve in the IS/LM model, asgreater output increases the demand for money and causes this value to increase to keep it in equilibriumwith supply. The Fisher equation shows the nominal version of this to be approximately equal to the realtype plus the rate of inflation. For 10 points, name this cost of borrowing money.
Gibson's paradox is the fact that while the gold standard was in force, this value was positivelycorrelated with the wholesale price level rather than inflation.
 interest rate