If the central bank creates too much money, _____ is the result. If the central bank doesn't create enough money, an economic _____ is the result.

Question

Quizplus · Accepted Answer

Creating too much money leads to inflation as the increased money supply reduces the value of money, causing prices to rise. Conversely, not creating enough money can lead to an economic slowdown due to insufficient liquidity for economic activities.

If the Central Bank Creates Too Much Money, _____ Is