why did friedrich hayek call expansionary spending dangerous? he felt it could lower the money supply and…
why did friedrich hayek call expansionary spending dangerous? he felt it could lower the money supply and cause deflation. he felt it could lead to inflation and poor decisions by consumers. he felt it could lead to deflation and poor decisions by consumers. he felt it could lower available credit and cause a drop in prices.
Answer
Brief Explanations:
Friedrich Hayek, an economist, believed that expansionary spending increases the money - supply in the economy. This can lead to inflation as too much money chases too few goods. Also, it can distort price signals, causing consumers to make poor decisions.
Answer:
He felt it could lead to inflation and poor decisions by consumers.