An understanding of the money supply is critical to understanding ________,such as occurred in Germany from 1922 to 23.
A) economic depression
B) falling interest rates
C) hyperinflation
D) a falling price level
E) disinflation

Question

Quizplus · Accepted Answer

The money supply directly affects the level of prices in an economy. Hyperinflation, as occurred in Germany from 1922 to 23, is an extreme example of the devastating effects of an excessive increase in money supply. The inflation rate skyrocketed, causing a collapse of the German currency and an economic crisis.

An Understanding of the Money Supply Is Critical to Understanding