Download or read book A Monetary Analysis of Pre-financial Crisis Investor Behavior written by Martin Mygind and published by . This book was released on 2010 with total page 89 pages. Available in PDF, EPUB and Kindle. Book excerpt: Money does not add to an equal increase in terms of exchangeable value. In the distinction between the two types of money expansion, it is revealed that the increase in the supply of money from banks neutralized the price level, as the lending criteria assured that the increase in the money supply was accompanied by an equal increase in exchangeable value in the market for products and services. It is the expansion of base money that causes excess lending. This is visualized by the Equation of Exchange where the effects can be analyzed. Here it is concluded that the increase in the supply of money did not spawn an equal supply of products and that the effect hereof was an increasing price level. The overall conclusion is that the increasing supply of money gives consumers incentives to consume what they would otherwise never consume, companies incentives to produce what they would otherwise never produce, and investors to invest in assets they would otherwise never invest in.