4
QuizMultiple Choice

Study Guide and Quiz

Question 4 • GA-Introduction to Business and Technology

What is most likely to happen if the Fed prints too much currency?

Answer
A
A decrease in product prices
B
A decrease in the number of banks
C
An increase in inflation
D
An increase in spending power

Explanation

If the Fed creates too much currency, the amount of money in circulation grows faster than the supply of goods and services. More money competing for the same goods tends to push prices up, causing inflation. Therefore, the most likely result is an increase in inflation.

AI-written and checked against the verified answer.

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