The U.S. government is concerned about inflationary pressures that seem to be building within the nation. Restricting the growth of money supply provides an effective strategy to reduce these inflationary pressures.

Question

Quizplus · Accepted Answer

A basic cause of inflation is a rapid increase in the supply of money, where "too much money is chasing too few goods." When the money supply increases too rapidly, the extra money in circulation increases the demand for goods relative to supply, causing inflationary pressures to build.

The US Government Is Concerned About Inflationary Pressures That Seem to to Be