Answered

Explore IDNLearn.com to discover insightful answers from experts and enthusiasts alike. Ask your questions and receive comprehensive and trustworthy answers from our experienced community of professionals.

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 value your participation in this forum. Keep exploring, asking questions, and sharing your insights with the community. Together, we can find the best solutions. Your questions deserve accurate answers. Thank you for visiting IDNLearn.com, and see you again for more solutions.