7. Monetarists do not believe that monetary policy can permanently fix interest rates at a low level in order to stimulate investment. Expansionary monetary policy will initially cause interest rates to decline, but eventually this initial reaction will be reversed . Income will expand. As full employment is approached, prices will rise. If the expansionary policy continues, so will the price increases. Private sector decision-makers will come to anticipate the rising prices. All these factors will serve to increase interest rates and prevent the monetary authorities from maintaining them at a low level.