Money and Types of Money · UPSC CDS/OTA · Question 30 of 30

Money and Types of Money – Question 30

Step-by-step solution. Money and Types of Money for UPSC CDS/OTA.

Topic
Money and Types of Money
Subject
General Studies
Difficulty
Medium
Solve Time
45–60 sec

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Q · Money and Types of MoneyMedium · 45s

Q₃₀. If money supply in an economy increases, what is its likely effect on the economy?

TopicMoney and Types of Money
Question Typemultiple choice
DifficultyMedium
Marking+1 / −0.33
Test Duration30 min

Step-by-Step Solution

The complete worked solution.

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Excess money supply without a real output increase leads to inflationary pressures.

Final Answer: Option C — It may lead to inflation if not backed by output
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Money and Types of Money Question 30 – UPSC CDS/OTA