Question

Explain how controlling money supply is helpful in reducing excess demand.

Answer 1

People demand more when their income is more if we control over money supply than income will reduce & it directly effect demand

Answer 2

when people have more money or the government encourages the production of money the income increases and so does the economy. their willingness and ability to buy a product increases. so when the government reduces the production of money the wants will decrease and the resources will be saved because they are limited. and the market might reach its equilibrium.