Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 1 - Part I - Ten Principles of Economics - Quick Check Multiple Choice: 6


a. the central bank creating excessive amounts of money

Work Step by Step

Inflation is caused primarily by an increase in the quantity of money. As the central bank introduces more money into the economy, this makes the currency less valuable. This also makes prices seem higher relative to the decreased value of the existing money.
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