Some Economists Argue That Simply and Suddenly Reducing Money Supply

question 120

Essay

Some economists argue that simply and suddenly reducing money supply growth is a costly way to reduce inflation and that it may not work. For example, if a government cuts money growth but makes no real reform, people expect that the government will soon start printing more money again to pay for its expenditures, and the promise to fight inflation will not be credible. Explain the importance of an inflation-reduction policy that is announced ahead of time and is credible.

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Definitions:

Subdatasheets

A feature in some database software that allows users to view and edit related data from a related table or query in a hierarchical format.

Employers Table

A structured arrangement of data related to employees in a database or spreadsheet, often including columns for name, position, salary, and other relevant information.

Default Value

A predefined value automatically assigned to a field or variable if no other value is specified by the user or process.

Input Mask

An input mask is a template that dictates the allowed format and type of data entry into a field, like enforcing phone number or date formats in a form.