Economy, asked by mamun59, 1 year ago

If the supply of money exceeds the aggregate supply of goods and services in an economy how it creats an inflationaly pressure?? IWant specific answer... NO SPAM


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Answers

Answered by Tapaswini45
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If the supply of money exceeds the aggregate supply of goods and services in an economy then people will have more money in their hands to buy more goods. Thus, the demand for goods will increase so the producers will increase the price of goods and supply to earn more profit. Thus, the rise in prices, demand and supply shows an increase in the inflationaly pressure in the economy.

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