Suppose that the government of Venezuela decided to give everyone in the country the equivalent of $20,000. Upon receipt of the money, people raced to the stores to buy furniture, electronics, and new clothes. There was such high demand for goods that producers raised prices. What is this an example of?

Question

Quizplus · Accepted Answer

This scenario is an example of inflation, where an increase in the money supply leads to higher demand for goods, causing producers to raise prices.

Suppose That the Government of Venezuela Decided to Give Everyone