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The Economy in Palau Has Been Stagnant for Some Time

Question 173

Multiple Choice

The economy in Palau has been stagnant for some time.The national bank thinks that increasing the money supply will encourage investment within the country,but some economists oppose this idea,arguing that it will cause inflation.Which of the following would support the argument that increasing the money supply will cause inflation?


A) Jobs will be created.
B) Banks will lower interest rates.
C) Wages will decrease.
D) Foreign investment will be discouraged.
E) Only low-technology sectors will benefit.

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