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

1 answer

Answer

1172886

2026-08-08 21:50

+ Follow

This phenomenon is called inflation. When the money supply increases faster than the economy's ability to produce goods and services, it leads to a decrease in the purchasing power of money, causing prices to rise. Inflation can erode savings and alter spending behavior, affecting overall economic stability.

ReportLike(0ShareFavorite

Copyright © 2026 eLLeNow.com All Rights Reserved.