Why does the government monitor the size of the money supply?

A. So that they can maintain stability and limit inflation.
B. So that they can better control the electorate.
C. So that they can better control tax revenue.
D. So that they can manipulate the GDP.

Question

10-07-2024
Social Studies

Answered

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Why does the government monitor the size of the money supply?

A. So that they can maintain stability and limit inflation.
B. So that they can better control the electorate.
C. So that they can better control tax revenue.
D. So that they can manipulate the GDP.

Sagot :

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GinnyAnsweridn GinnyAnsweridn · Answer 1 · 2024-07-10T23:17:43-04:00

Final answer:

Governments monitor the money supply to control inflation and maintain economic stability.

Explanation:

The government monitors the size of the money supply to maintain stability and limit inflation. When there are more transactions in a growing economy, there is a need for more money to facilitate these transactions. By controlling the money supply, the government can impact price levels, inflation rates, exchange rates, and the business cycle.

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