Asked by Kanidra Stringer on Jun 03, 2024
Verified
Inflationary pressures will begin to build if the money supply grows too rapidly.
Inflationary Pressures
Economic conditions that tend to lead to inflation, which is an increase in prices and decrease in the purchasing value of money, often resulting from supply and demand imbalances.
Money Supply
The total amount of money available in an economy at a particular time, including cash, bank deposits, and liquid assets.
- Comprehend how the Federal Reserve’s maneuvers influence the money supply and interest rates.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
True
Explanation :
When the money supply in an economy grows too rapidly, it increases the amount of money available for consumers and businesses to spend. This can lead to higher demand for goods and services, which can push prices up, creating inflationary pressures.
Learning Objectives
- Comprehend how the Federal Reserve’s maneuvers influence the money supply and interest rates.
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