Illustrate what would happen to the price level

Reference no: EM1336683

Effects of an announced future money supply decrease

If the demand for money depends positively on real income and depends inversely on the nominal interest rate, what would happen to the price level today if the central bank announces (and people believe) that it will decrease the money growth rate in the future, but it does not change the money supply today.

Reference no: EM1336683

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