Asked by Jessica Pierre on May 16, 2024
Verified
Inflation and unemployment both increase as the money supply increases.
Inflation
The rate of acceleration in the average pricing of goods and services, thereby diminishing the power of purchase.
Unemployment
The condition where people who have the ability to work and are actively looking for jobs cannot secure employment.
Money Supply
The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances in bank accounts.
- Study the consequences of monetary policy actions on inflation and unemployment.
Verified Answer
JE
Joshuah EwingMay 20, 2024
Final Answer :
False
Explanation :
Inflation may increase as the money supply increases because more money chasing the same amount of goods can lead to higher prices. However, unemployment typically decreases when the money supply increases because more money in the economy can stimulate demand for goods and services, leading to job creation.
Learning Objectives
- Study the consequences of monetary policy actions on inflation and unemployment.