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All other factors being equal, that would be tantamount to reducing demand. Nominal prices would fall, yes (deflation), but a failure to increase supply would r
by sb057 4y ago
All other factors being equal, that would be tantamount to reducing demand. Nominal prices would fall, yes (deflation), but a failure to increase supply would result in shortages. Shrinking the money supply would have quite a similar effect to price ceilings in this scenario.