8. Nor do monetarists believe that monetary policy can permanently reduce unemployment to below its normal rate. Monetary acceleration will expand aggregate demand. Initially, unemployment will fall because

(a) in real terms, contractual money rates negotiated before the expansion in demand will be temporarily below their long-run equilibrium and

(b) job search time will decline as job seekers accept money wage offers quickly since they are unaware that attractive "inflation-created" money wage offers are available from other employers. However, as the inflation continues, both workers and union representatives will acquire better information and come to anticipate the inflation. Contractual wages will return to equilibrium. The amount of time persons spend looking for a job will return to normal. Once this happens, unemployment will also return to its normal rate, even though the inflation will continue.