why did friedrich hayek call expansionary spending dangerous?\nhe felt it could lower the money supply and…
why did friedrich hayek call expansionary spending dangerous?\nhe felt it could lower the money supply and cause deflation.\nhe felt it could lead to inflation and poor decisions by consumers.\nhe felt it could lead to deflation and poor decisions by consumers.\nhe felt it could lower available credit and cause a drop in prices.
Answer
Brief Explanations:
Friedrich Hayek was concerned that expansionary spending, which increases the money - supply in the economy, could lead to inflation. Also, an over - expansion of the money supply can distort price signals, causing consumers to make poor decisions.
Answer:
He felt it could lead to inflation and poor decisions by consumers.