If there is an increase in the money supply that cause money to ode purchasing power and leads to inflation what happens to prices

Answer: prices of commodities increases causing a rise in the overall price level.

Explanation: There is a link between money supply and inflation, if there is an increase in the money supply faster than the growth in real output will cause inflation. The implication is that there would be more money chasing few number of goods. Increase in money supply will lead to a corresponding increase in consumer spending. Change in money supply leads to a change in price level and change in the supply of goods and services. Increase in money supply leads to a decrease in the value of money, which in turn result to a rise in inflation, and inflation result to decrease in the value of money.

Price increases

Explanation:

Inflation is the increase in the general price level of goods and services. It is categorized into; demand-pull inflation, supply push inflation, creeping inflation, hyper inflation, etc.

Demand pull inflation is caused by the increase in the quantity demanded of goods and services while supply remained unchanged.

Supply push inflation is caused by thee decrease in the quantity supplied of goods and services when demand remains constant.

Creeping inflation is a form of inflation in which the general price level of goods and services increase slowly over time.

Hyper inflation is a situation in which there is a sudden hype in the general price level of goods and services.