Currency standard in the united states is called fiat

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The currency standard in the United States is called “fiat” which basically means that money has no security backing. In other words, our government has the ability to print as much money as they feel is necessary. What would happen to each of the following economic variables: M1, interest rates, inflation and wages, if the government increased the money supply by 20 percent per year? In general, what impact does increasing or decreasing the printing of money have on the economy (in your discussion, use the concepts of the demand and supply of money). Use the demand and supply graph to explain your answer.

Reference no: EM131097919

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