Extremely tight control over the money supply may result in ________,a condition that has plagued Japan since 1998.

Question

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When there is extremely tight control over the money supply, it can lead to deflation, which is characterized by a decrease in the general price level of goods and services. This has been a persistent problem in Japan since 1998, where low interest rates and a lack of demand have contributed to a deflationary spiral. Inflation (A) and hyperinflation (D) are not likely to occur in a situation of tight monetary control. Tariffs (C) are a trade policy measure and not directly related to the money supply.

Extremely Tight Control Over the Money Supply May Result in ________,A