What will cause people to expect higher rates of inflation? How will expectations of inflation affect the actual rate of inflation?
Answer to relevant QuestionsWhat is the relationship between the mpc, the mpcdand the mpw?What is meant by the terms narrow money and broad money? Does broad money fulfill all the functions of money?Why might the relationship between the demand for money and the rate of interest be an unstable one?Under what circumstances will (a) A rise in investment and (b) A rise in money supply cause a large rise in national income?Is it possible for the government to target the money supply over the longer term without targeting the PSNCR?
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