Question

The U.S. economy begins to slow, so the U.S. prints more currency. What is the risk of this action? (I think its b or c, but i cant figure out which one.)

The currency will be hoarded.

The currency will lose value.

The government will gain debt.

The government will pressure banks.,

Answer 1

If a central bank prints more currency, that is not creating value - the value of the goods and services within the economy remains the same. Therefore, the value of said currency will simply change, resulting in a currency devaluation or inflation. This is seen in many economies where the central bank tries to head off a financial crisis. Therefore, the correct answer is "the currency will lose value".