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A long-run effect of increasing the money supply can be inflation?
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∙ 10y ago
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∙ 10y ago
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When your country is experiencing inflation the government may try to control it by?
Yes government tries to control the inflation by increasing the supply into the market, this balances the demand supply curve
When the government attempts to cover large deficits by creating more money. what is the probable result called?
Inflation. Increasing the money supply dilutes the value of the money already in the economy. This dilution has the effect of driving up prices, thus inflation.
When economy is moving in recession process demand is increasing supply is decreasing prices are increasing than what is that type of inflation?
I think you're referring to a so called Running Inflation. Check the link for more information.
What creates inflation?
Milton Freedman probably is the best person to look up for this answer, and he has written much on this topic. Basically it is a monetary phenomina. Increases and decreases in the money supply create inflation or deflation. Think of the root form of this word, inflate, such as a balloon or a tire. Increasing the quantity of a price does not make sense, however rising prices due to increasing the quantity of money in the money supply does.
How does inflation effect cost of capital?
Inflation is too many dollars chasing too few goods. It happens when the money supply is variable and the cost of borrowing from commercial lenders (1. federal reserve) is too low.
When your country is experiencing inflation the government may try to control it by?
Yes government tries to control the inflation by increasing the supply into the market, this balances the demand supply curve
When the government attempts to cover large deficits by creating more money. what is the probable result called?
Inflation. Increasing the money supply dilutes the value of the money already in the economy. This dilution has the effect of driving up prices, thus inflation.
When economy is moving in recession process demand is increasing supply is decreasing prices are increasing than what is that type of inflation?
I think you're referring to a so called Running Inflation. Check the link for more information.
What creates inflation?
Milton Freedman probably is the best person to look up for this answer, and he has written much on this topic. Basically it is a monetary phenomina. Increases and decreases in the money supply create inflation or deflation. Think of the root form of this word, inflate, such as a balloon or a tire. Increasing the quantity of a price does not make sense, however rising prices due to increasing the quantity of money in the money supply does.
The depression of the 1870's led to increasing demands for?
Inflation of the money supply by issuing more paper or silver currency
What is quantitive easing?
Increasing the money supply thus eventually creating inflation - or in extreme situations, hyperinflation. It is a tool used by central banks to offset deflation and recession.
How does inflation effect cost of capital?
Inflation is too many dollars chasing too few goods. It happens when the money supply is variable and the cost of borrowing from commercial lenders (1. federal reserve) is too low.
If the government increases the supply of money circulating in the economy How might this impact individuals?
An increase in the money supply can result in a greater demand by increasing the number of potential buyers. This can cause inflation, which means generally higher prices for goods and services.
What do monetarians believe regarding inflation?
the main cause of inflation is the growth of money supply
Why did some people in the 1890s think that going off the gold standard would cause inflation?
They believed that increasing the money supply would cause inflation. Inflation, in turn, would result in rising prices. Higher prices for crops would help farmers pay back the money that they had borrowed to improve their farms.
What impact will short supply of material have on budget preparation?
A short supply will usually have the effect of increasing price. This is due to basic laws of supply and demand. If the price of raw materials increases, then the forecasted profit will be in jeopardy.
what are the causes of running inflation?
Demand Pull Inflation , where demand increased from supply
