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Question 2 (20 points): Since September 2020, the consumer price index (CPI) has risen from 260 to over 300 (see below). FRED I musumw Dru-.9
Question 2 (20 points): Since September 2020, the consumer price index (CPI) has risen from 260 to over 300 (see below). FRED I musumw Dru-.9 llmen Im M Human Lnnsnmars: All Mann m us. my Average 510 :M- fr/ __ :ar- / M ' can a. (10 points) Explain the implications of this trend on (i) ination and (ii) value of money. Remember to be specic about how it affects the value of money. b. (5 points) Given this trend, do you expect the money demand to increase or decrease? Provide a brief explanation for your answer and illustrate this on a graph of money demand. 0. (5 points) Given your answer in part b, do you expect people to consume more or less goods and services? Provide a brief explanation for your
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