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237) For example when the government of Erewhon increased spending on education and infrastructure this caused the unemployment rate to decrease giving people more employment opportunities and money to spend, but when the President of Erewhon decreased spending on education and infrastructure to decrease inflation some people were without jobs and thus unable to spend money...
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In reference to inflation, Colander also points out in the book “Economics†that expectations people have can also play a key role. “When expectations of inflation are high, people tend to raise their wages and prices causing inflation. Expectations can become self fulfilling†(Colander, 2003...
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