answersLogoWhite

0

When too much money is in circulation, it can lead to inflation, where the purchasing power of money decreases, causing prices to rise. This oversupply can erode savings and destabilize the economy, as consumers and businesses may struggle to keep up with increasing costs. In extreme cases, it can result in hyperinflation, where prices soar uncontrollably, leading to a loss of confidence in the currency. Central banks often respond by tightening monetary policy to reduce the money supply and stabilize the economy.

User Avatar

AnswerBot

1w ago

What else can I help you with?