excess of money supply hinders the process of economic growth give reason?

The answer given by Dev is correct. Excess of money supply will lead to an increase in general price level prevailing in the economy (or inflation) because the production of goods and services will remain the same. This increase in general price level will lead to an increase in interest rates on investment expenditures resulting in a fall in investment activities in th economy. Hence, economic growth will be adversely affected by such inflationary pressures.

  • 25
true .

if money supply increase without increase in production (for example fake currency printing) then there will be excess money supply in the economy. it causes inflation. it  will increase demand in the economy because demand will be more than its supply. 
  • 9
What are you looking for?