Question: Consider the Friedmans modifications to the liquidity preference framework. Assuming that the liquidity effect is smaller than the other effects and that the adjustment of

Consider the Friedmans modifications to the liquidity preference framework. Assuming that the liquidity effect is smaller than the other effects and that the adjustment of expected inflation is quite slow, should short-sighted policy-makers increase or decrease the money supply growth rate if they want to decrease interest rates? Explain your answer

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