If velocity is relatively stable and the central bank persistently increases the money supply faster than the rate of real output,what will result?

Question

Quizplus · Accepted Answer

This situation is known as inflationary pressure, where an increase in the money supply without a corresponding increase in output leads to an increase in the overall price level. This results in inflation, as the purchasing power of money decreases, and goods become more expensive.

If Velocity Is Relatively Stable and the Central Bank Persistently