An increase in the amount of money circulating in the econmomy, ceterics pair bus will result in which of the following
A. Demand side inflation
B. supply side deflation
C. Supply side inflation
D. Demand side deflation
http://www.auburn.edu/~johnspm/gloss/ceteris_paribus
To determine the answer, we need to understand the relationship between an increase in the amount of money circulating in the economy and its impact on inflation or deflation.
When there is an increase in the amount of money circulating in the economy, it generally leads to an increase in demand for goods and services. This increased demand can result in inflation, which is a general rise in the prices of goods and services.
Therefore, the correct option would be A. Demand side inflation.
To summarize the process of reasoning:
1. Identify the main factor: Increase in the amount of money circulating in the economy.
2. Understand the impact of this factor: It generally leads to an increase in demand for goods and services.
3. Determine the consequence: Increased demand can result in inflation, which is a rise in prices.
4. Choose the option that matches the consequence: Option A. Demand side inflation.