Excessive growth in money supply leads to high inflation.

Here's why:

1. Money Supply Increase: When there is an excessive growth in the money supply, it means there is more money circulating in the economy than there are goods and services available.

2. Demand Increases: With more money in the hands of consumers, demand for goods and services increases.

3. Prices Rise: As demand increases, suppliers may not be able to keep up with the demand. This scarcity can lead to an increase in prices.

4. Inflation: As prices rise, the value of money decreases, leading to inflation.

So, the correct answer is "high inflation".

Question

Excessive growth in money supply leads to high inflation.

Here's why:

1. Money Supply Increase: When there is an excessive growth in the money supply, it means there is more money circulating in the economy than there are goods and services available.

2. Demand Increases: With more money in the hands of consumers, demand for goods and services increases.

3. Prices Rise: As demand increases, suppliers may not be able to keep up with the demand. This scarcity can lead to an increase in prices.

4. Inflation: As prices rise, the value of money decreases, leading to inflation.

So, the correct answer is "high inflation".

Knowee AI · Accepted Answer

Excessive growth in money supply leads to high inflation.

Here's why:

1. Money Supply Increase: When there is an excessive growth in the money supply, it means there is more money circulating in the economy than there are goods and services available.

2. Demand Increases: With more money in the hands of consumers, demand for goods and services increases.

3. Prices Rise: As demand increases, suppliers may not be able to keep up with the demand. This scarcity can lead to an increase in prices.

4. Inflation: As prices rise, the value of money decreases, leading to inflation.

So, the correct answer is "high inflation".

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Excessive growth in money supply leads to

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