Real value of money Changing Value of Money Short run: value declining LR Long run: value reaches new lower level Real value of money Time (t) Start by clicking the first item in the sequence or dragging it here Drag the items below into the box above in the correct order, starting with the first item in the sequence. The Fed's open market purchase injects new money into the economy. With increased reserves, banks issue more loans to firms and consumers, who have increased real purchasing power as a result. Prices across the economy increase and the value of money falls. Real impacts of the expansionary policy dissipate completely, and the economy experiences inflation