Answer to Question #4601 in Macroeconomics for Jessica Richardson

Question #4601
Show how an announcement by the Fed that the money supply will be increased in the future, will lead to an increase in the price level today.
1
Expert's answer
2012-04-10T08:00:54-0400
First step: Announcement by the Fed that the money supply will be increased in the future will cause expectation of decreasing price of money (due to supply increase)
Second Step: everyone will start buying and spending money until they lose their value
Third step: Incremental demand in the market will lead to increasing in the price level

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS
paypal