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Discuss about the inflationary bias in the economy
As the costs are lower, there is a greater incentive for the government to expand the money supply. Agents perceive this and so anticipate a faster growth rate of the money supply, and hence expect higher inflation. The optimal response for the government is then to produce this higher level of inflation. In equilibrium there is now a greater level of inflationary bias in the economy.
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how do i answer a problem question in law base on the law of contract for final assesment
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