When a country's central bank increases the money supply, which of the following happens to a unit of that country's money?

Question

Quizplus · Accepted Answer

When a central bank increases the money supply, the value of each unit of currency decreases, leading to inflation. This means that the money has less purchasing power than before, both domestically and in terms of foreign currency. More money in the economy can lead to an increase in demand for goods and services, which can drive up prices. In addition, the decrease in the value of the currency makes foreign goods relatively more expensive, reducing purchasing power in terms of foreign currency exchange rates.

When a Country's Central Bank Increases the Money Supply, Which