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

Assessment: WAEC SSCE - Economics - 2006 (Objective) Subject: Economics

Question 1 Report

The policy of government to increase the supply of money to meet its own expenditure plans is likely to be
Answer Details
Increasing the supply of money by the government to meet its own expenditure plans is likely to be inflationary. This means that the value of money will decrease and the prices of goods and services will increase. This happens because there is more money in circulation and therefore there is more demand for goods and services. As a result, sellers can increase their prices to match the increased demand. This can lead to higher inflation rates, making it more expensive for people to buy goods and services.
Read lesson note on Money And Inflation (WAEC)
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