Answered

Get expert insights and community-driven knowledge on IDNLearn.com. Our platform offers reliable and comprehensive answers to help you make informed decisions quickly and easily.

If there is an increase in the money supply that causes prices to rise and
leads to inflation, what happens to money?
• A. It loses purchasing power.
• B. It changes from fiat money to commodity money.
•
C. It changes from commodity money to fiat money.
•
D. It gains purchasing power.
SUBMIT
Mathematics of personal finance

Sagot :

The increase in the money supply that causes prices to rise and leads to inflation, loses purchasing power.

What is inflation?

Inflation refers to the persistent rise in the general prices of commodities in the economy over a period of time. If the prices of goods and services increase in an economy without an increase in income of people, it reduces the purchasing power of individuals.

This follows the law of demand which states that; the higher the price, the lower the quantity demanded; the lower the price, the higher the quantity demanded.

learn more of inflation here https://brainly.com/question/16502523

#SPJ9

We appreciate your presence here. Keep sharing knowledge and helping others find the answers they need. This community is the perfect place to learn together. Discover the answers you need at IDNLearn.com. Thank you for visiting, and we hope to see you again for more solutions.