In 2008, the US economy fell into a major recession. The fiscal authority (Congress) passes a major spending bill called the American Recovery Act (ARA), which funneled government spending into infrastructure projects without changing taxes.
In a Keynesian model where only a fraction of firms in the economy have fixed prices, we would expect inventories to temporarily
, money demand to
, real money balances to
in the short run as a result of the ARA.