The policy of government to increase the supply of money to meet its own expenditure plans is likely to be

  • A speculative
  • B deflationary
  • C inflationary
  • D contractionary

The correct answer is C. inflationary

The policy of a government to increase the supply of money to meet its expenditure plans is likely to be inflationary since Inflation is typically associated with an increase in the money supply.

Indeed, When more money is in circulation, the value of money can decrease, leading to rising prices, or inflation.

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