No one wants to purchase income-earning assets. They will just increase their idle money balances. The relevant graph shows a demand curve for money that has a horizontal section. If businesses have high inflationary expectations they may not stop borrowing during periods of monetary restraint. Particularly if they believe prices will rise faster than interest rates.
Monetarists believe that V is constant and Q is relatively stable.
The natural rate of employment is the level of employment that, according to conservatives, is where the economy will always tend to move toward. Output is stable at this level. An outward shift in the production possibilities curve describes an increase in potential output. According to Schiller we can increase the productivity of the economy by increasing investment in human capital, physical capital, management training and research and development . Increased growth rates and higher per-capita incomes might harm the environment, and deplete scarce resources .