If increased supply leads to lower prices, why is rapid growth of the money supply usually accompanied by high interest rates?
What will be an ideal response?
The key issue is that rapid growth of the money supply usually creates inflation, and banks raise nominal interest rates to compensate. Real interest rates may remain low or be even negative at times.
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Which is true?
a. China implemented a one child/one family policy in order to limit population growth. Country leaders realized that the country's resources would not be sufficient for a growing population b. when a country's population rises faster than its output of goods and services the average citizen will be worse off c. economists believe that the best method that a country can employ to reduce population growth is to provide women with more educational and career opportunities d. all
Using a change in supply and/or demand, explain the following phenomena:
a. All else constant, gasoline prices are higher in summer than winter months. b. At the same time that the quality of personal computers has been increasing, the price of personal computers has been falling.