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Speculators and fully anticipated expansionary monetary policy problem

  1. May 4, 2012 #1
    http://img39.imageshack.us/img39/6386/macro2.jpg [Broken]

    I don't understand the answer to this question.
    The answer is
    but I don't understand why.

    Last edited by a moderator: May 6, 2017
  2. jcsd
  3. Jun 10, 2012 #2
  4. Jun 11, 2012 #3
    Looks like C from the above power point. Of course that assumes an equal distribution of new money (the helicopter effect) which is not really the case as is pointed out in, “The case against the fed”.
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