What will be the impact of unlimited money supply?

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What will be the impact of an unlimited or abundant money supply?

Today I was listening to a debate on the topic "Can we have unlimited  money supply" and "Effect of unlimited money supply on an economy".  There were two schools of thought: 1. If Central Bank reduces the reserve requirement (as it is currently  zero in some countries) and allow commercial banks to issue as much  loans as possible, this will fuel economic growth. 2. If Central Banks reduce the reserve requirement (as it is currently  zero in some countries) and allow commercial...

Answer:

You're confusing three things: the money multiplier, required reserves, and voluntary reserves. Money...

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Other solutions

What will be the impact of unlimited/abundant money supply?

Today I was listening to a debate on the topic "Can we have unlimited money supply" and "Effect of unlimited money supply on an economy". There were two schools of ...show more

Answer:

This is call short term patching economy .Reducing reserve and issue currency more than backup reserve...

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I6RDSGENFWQIBTZR6DX2XDEMPA at Yahoo! Answers Mark as irrelevant Undo

What impact do open market operations have on the money supply?

Below is the T-account for Country One Bank, the only bank in a small island nation. In addition to the demand deposits of $100,000, citizens hold $20,000 in coins and currency. Assume that demand deposits and currency are the only forms of money. Citizens...

Answer:

The only real statement in the question that is significant when talking about money supply is "...

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What impact will demonetizing pre 2005 notes have on the economy, money markets, and the Indian public, in general?

Demonetizing notes will tend to scare people with small life savings and no bank accounts. On the other hand, people having black money may now convert it into new currency notes. I feel demonetizing pre-2005 notes will impact poor more,with very little...

Answer:

It would have impact on the domestic black money which is more or less equivalent 50% of black money...

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Germany Recognizes Bitcoin As "Private Money", Sales Tax Coming Soon---> If what Germany did is going to be imitated by other countries as well, this will have a positive or a negative impact on the price of Bitcoins?

Since the seller has to pay taxes when he sells bitcoins, he will be willing to sell at an higer price that he would without taxation, and this will take the price at an higher level. This will be an advantage for the owners of bitcoins operating in...

Answer:

The rebels already like the concept. This wil... You must be signed in to read this answer.Continue...

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Which of the following statements best describes the impact of a decrease in the money supply? ?

Which of the following statements best describes the impact of a decrease in the money supply? A. The value of money increases and the price level decreases. B. The value of money and the price level increase. C. The value of money and the price level...

Answer:

B - coz any shortage drives up prices and coz inflation occurs most when money supply is increased like...

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For each, state the impact on the money demad curve, and if the Fed should increase or decrease money supply..

..if it wants to keep the interest rate unchanged. A) people start making more of their purchases over the Internet using credit cards. B)greater fear of credit card fraud makes people stop buying goods over the internet with credit cards, and discourages...

Answer:

A-Nothing B-Decrease Money supply C-Increase Money supply

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Answer:

You would see inflation, where each unit of money would be worth roughly 25% less. Think of it like...

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lanemahn... at Yahoo! Answers Mark as irrelevant Undo

How should I think about increases in money supply and the subsequent impact on purchasing power?

If money supply (m1, m2, m3) increases by x%, does the real purchasing power of fiat currency decrease by x%? Why or why not?

Answer:

Answer is no. Money supply is a stock of outstanding 'money' in circulation. It grows in response to...

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