What is one reason why a government will deliberately inflate its national money supply?
A) The action benefits retirees and anyone else on a fixed income.
B) The action promotes the interests of domestic producers at the expense of foreign ones.
C) The action enables the government to borrow funds to remain in operation.
D) The action temporarily boosts the growth rate of a sluggish economy.
E) The action helps to keep inflation under control in the long run.

Question

Quizplus · Accepted Answer

Deliberately inflating the national money supply can boost economic growth in the short term by increasing the availability of credit and lowering interest rates, which can encourage borrowing and investment. This is often seen as a way to jumpstart a sluggish economy.

What Is One Reason Why a Government Will Deliberately Inflate