Question

During the 1970s the federal reserve allowed rapid credit expansion in order to combat unemployment. what was the most likely unintended result of this monetary policy action?

Answer 1

the unintended results of rapid credit expansion would be increase in inflation and decreasing currency value

even though on the surface it looks like that company has enough cash to hire employees, a big part of their assets were supported by liability. This will make the market became a very risky investment which drove investors away, which will lead to inflation and decreasing currency value