The expectation of greater inflation resulting from the government's creation of money often results in a:
A)higher nominal demand for goods.
B)lower money velocity.
C)less inflationary pressure.
D)less rapid money growth.

Question

Quizplus · Accepted Answer

The expectation of greater inflation typically leads to a higher nominal demand for goods as consumers and businesses try to purchase goods and services before prices rise further. This behavior is based on the anticipation that the value of money will decrease as inflation increases, making goods and services more expensive in the future.

The Expectation of Greater Inflation Resulting from the Government's Creation