During Inflation,an Increase in the Amount of Currency Available Leads

question 35

Multiple Choice

During inflation,an increase in the amount of currency available leads to

• A)overheating of the economy thereby reducing the production levels in the economy.
• B)changes in the relative demand-and-supply conditions in the foreign exchange market.
• C)a reduction in the rate of inflation thus leading to an appreciation of the currency.
• D)decreased lending by banks thereby resulting in more savings.
• E)a decrease in the demand for goods and services,which drives currency value higher.