What is one reason why a government will deliberately inflate its national money supply?
A) The action promotes the long-term health of the national economy.
B) The action is part of efforts to attract overseas investors and immigrant labor.
C) The action is part of printing money to pay off the government's debts.
D) The action tamps down the growth rate of an overheated economy.
E) The action helps the money supply keep up with the consequences of rising prices.

Question

Quizplus · Accepted Answer

The deliberate inflation of the national money supply is often done by governments as a way to pay off their debts by printing more money, which reduces the value of each individual unit of currency. This can be a short-term solution, but it can also lead to higher levels of inflation and economic instability in the long term.

What Is One Reason Why a Government Will Deliberately Inflate