Answer:
Consumer Price Index (CPI)
Explanation:
1- By definition CPI is the weighted average of a consumer's basket volume for any purchase service or good. When money supply increases, GDP increases, and the spending of a customer increases. Hence resulted in increased CPI.
2- Interest rate decreases when money supply increases
3- Inflation is by definition a steady increase in the money supply if a country. So one can be replaced by another. Inflation does not come from money supply increase, it is in fact money supply increase
Answer:
The correct answer is monetary inflation.
Explanation:
The increase in money supply causes monetary inflation to rise. This is because, when making an expansionary monetary policy, that is, increasing the amount of money in the economy, prices will rise due to higher demand for goods and services. For example, in incurring deficits, the government must sell bonds to finance its debt, increasing the amount of money in the economy and thereby raising prices. Thus, the rise in currency culminates in rising prices and thus inflation.
