Final answer:
Increasing a country's money supply quickly can lead to high inflation, but it might be done to stimulate growth or combat recession despite potential inflationary risks.
Step-by-step explanation:
When a country significantly increases its money supply in a short period, it can lead to high inflation, where there is "too much money chasing too few goods." This dilution of purchasing power often follows the government financing oversized budget deficits by essentially printing more currency. A real-life example of this is Zimbabwe, where unchecked money printing to cover deficits led to hyperinflation and the eventual adoption of the U.S. dollar to stabilize the economy. Despite these issues, some countries may still increase their money supply, often in an attempt to stimulate growth or mitigate recessionary pressures. Actions like lowering banks' reserve requirements or implementing expansionary monetary policies can lead to temporary economic boosts, but they come with the risk of spurring inflation if mismanaged.