Asked by Sierra Ballard on Jul 20, 2024
Verified
An excess supply of money is eliminated by a decrease in the value of money.
Excess Supply
A situation where the quantity of a good or service that is available surpasses the quantity demanded at a current price, often leading to a price decrease.
Value of Money
The purchasing power of money, which can be affected by inflation and economic conditions.
- Gain insight into the effect of money supply and demand fluctuations on the price level.
Verified Answer
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Final Answer :
True
Explanation :
When there is an excess supply of money, it typically leads to inflation, which decreases the purchasing power or value of money, thereby balancing the excess supply by making each unit of currency worth less.
Learning Objectives
- Gain insight into the effect of money supply and demand fluctuations on the price level.