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

question 87

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 of goods and services which drives currency value higher.

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