chapter  9
27 Pages

Fighting Inflation: Controlling the Money Supply vs. Buffers and Tips

The analysis in Chapter 8 has brought us to the root of the inflation-- unemployment dilemma facing a civilized market economy. Government accepts the responsibility for acting as a balance wheel to create and maintain the demand necessary to assure the full employment of all who want to work In the rare periods of over full employment this may involve reducing total market demands. More commonly this balance wheel func-- tion involves either creating incentives for private-sector demand expan-- sion or by direct government purchases of goods and services through contract-letting and/or the expansion of public enterprises such as th~: National Park Service, the Post Office, etc.