Explain a reduction in expected inflation - prices and wages, Financial Accounting

Assume that prices and wages adjust rapidly so that the markets for labor, goods, and assets are always in equilibrium. What are the effects of each of the following on real money demand and the current price level? Explain in words.

(a) A temporary increase in government purchases.

(b) A reduction in expected inflation.

Posted Date: 3/23/2013 6:13:27 AM | Location : United States







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