Suppose the central bank in the nation of Zook attempts to p

Suppose the central bank in the nation of Zook attempts to pay off ts national debt by printing large amounts of currency. The large increase in the money supply causes the pice level to rise by 600 percent. What do you expect will happen to the value of Zook\'s currency? Instructions: Round your answer to 2 decimal places. The value of Zock\'s currency wantincrease by percent. (Cück 1o selecdt

Solution

Value of currency decreases by 600% as per classical theory of money because there is inverse relationship between supply and value of currency