A change in the money supply creates demand and cost pressures that lead to future increases in the price level from which main sources?
I.Excess demand for output and labor
II.Inflationary expectations
III.Raw materials prices

Question

Quizplus · Accepted Answer

All three sources contribute to future increases in the price level: excess demand for output and labor can drive prices up, inflationary expectations can lead to higher wages and prices, and increases in raw materials prices can raise production costs.

A Change in the Money Supply Creates Demand and Cost