President Dude, the leader of the island nation of Jaylo, refuses to raise taxes, but wants to expand many government services and increase the size of the Jaylo armed forces. He plans to pay for all of the desired expenditures by printing more money. If President Dude carries out his plan by rapidly increasing the supply of money, Jaylo will likely experience:
1. a severe recession.
2. reduced private sector spending.
3. widespread surpluses of goods and service
4. an increase in the rate of inflation.