Question

What is most likely to happen if the Fed prints too much currency? A. A decrease in product prices B. A decrease in the number of banks C. An increase in inflation D. An increase in spending power Please select the best answer from the choices provided A B C D

Answer 1

Answer: C

Explanation: Just did the test got 100%

Answer 2

The answer is C.
If the Federal government prints too much currency an increase in inflation is most likely happen. If you print more money the price of the current goods and services doesn’t change. However, households will have more cash to spend. If there is more cash that is after the same amount goods and services, companies will just put up the prices.