[Solved] When too much money is chasing too few goods, the situation is -

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Q.	When too much money is chasing too few goods, the situation is -
A.	Deflation
B.	Inflation
C.	Recession
D.	Stagflation
Answer» B. Inflation
Explanation: Inflation occurs when too much money is chasing too few goods. The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates. In general, mainstream economists divide into two camps: those who believe that monetary effects dominate all others in setting the rate of inflation, or broadly speaking, monetarists, and those who believe that the interaction of money, interest and out-put dominate over of her effects, or broadly speaking Keynesians. Other theories, such as those of the Austrian school of economies, believe that inflation of the general price level and of specific prices is a result from an increase in the supply of money by central banking authorities.

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