When the stock of money increases too rapidly

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Reference no: EM13995907

When the stock of money increases too rapidly, then the economy will likely experience

a. increasing prices, known as inflation

b. increasing unemployment

c. a decrease in M2

The money supply in the united states is backed by

a. the governments reserves of gold

b. the government’s ability to keep the value of money relatively stable

c. constant and consistent increases in the supply of money

Money that is backed by something tangible like gold

a. may experience arbitrary changes in its supply that can lead to inflation or unemployment

b. allows the government to manage the nations money supply

c. gives monetary authorities greater ability to fight inflation or unemployment

Reference no: EM13995907

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