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Q: If there is an increase in the money supply that causes money to lose its purchasing power and leads to inflation what happens to prices?
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If there is an increase in the money supply that causes money to lose its purchasing power and prices to rise?

It loses purchasing power.


How does inflation affect the airline industry?

Inflation affects the airline industry in a negative ways The increase in the prices does not help the business as the purchasing value of money is usually decreased which causes huge losses to the industry.


The economic problem can be explained in terms if too many people chasing few goods Explain What are the main causes of inflation?

Inflation is a persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in the available currency and credit beyond the proportion of available goods & services.


How is inflation caused?

we get two types of inflation demand-pull inflation, this inflation is happened from demand increase, the demand increase, the price gonna increase too. the cpi ( inflation ) index also increase. another type is cost-push inflation, this type is from cost increase. the wage rate and the price of raw materials increase, the cost of goods and service going up, and the price of goods and services also going up. that's the reason why inflation happened. hope this can help you


If there is an increase in the money supply that causes prices to rise and leads to inflation what happens to the money?

If there is a increase in money supply that is causing price to rise money only does one thing. The money that is taking is used for supply.

Related questions

If there is an increase in the money supply that causes money to lose its purchasing power and prices to rise?

It loses purchasing power.


How does inflation affect the airline industry?

Inflation affects the airline industry in a negative ways The increase in the prices does not help the business as the purchasing value of money is usually decreased which causes huge losses to the industry.


The economic problem can be explained in terms if too many people chasing few goods Explain What are the main causes of inflation?

Inflation is a persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in the available currency and credit beyond the proportion of available goods & services.


How is inflation caused?

we get two types of inflation demand-pull inflation, this inflation is happened from demand increase, the demand increase, the price gonna increase too. the cpi ( inflation ) index also increase. another type is cost-push inflation, this type is from cost increase. the wage rate and the price of raw materials increase, the cost of goods and service going up, and the price of goods and services also going up. that's the reason why inflation happened. hope this can help you


What causes Deflection?

the main causes of the inflation is increase in the percapita income and this results in increase in the standard of living of the people .. and the other one is increase in the percapita income in our country


If there is an increase in the money supply that causes prices to rise and leads to inflation what happens to the money?

If there is a increase in money supply that is causing price to rise money only does one thing. The money that is taking is used for supply.


What if there is an increase in the money supply that causes prices to rise and leads to inflation what happens to money?

If there is a increase in money supply that is causing price to rise money only does one thing. The money that is taking is used for supply.


If there an increase in the money supply that causes prices to rise and leads to inflation what happens to money?

If there is a increase in money supply that is causing price to rise money only does one thing. The money that is taking is used for supply.


If there is an increase in the money supply that causes prices to rise and leads to inflation what happens to money?

If there is a increase in money supply that is causing price to rise money only does one thing. The money that is taking is used for supply.


What are the causes of imflation?

The causes of inflation include the rise in the supply and demand of a product or service and an increase in wages/salaries.


What happens when too much money is in circulation?

Inflation happens. When the supply of money goes up. The value of money goes down. And prices go up. Inflation is not the same as rising prices. Inflation causes rising prices.


What causes structural inflation in developing countries?

increase in prices goods and services when government prints more money