Increases in money supply causes aggregate inflation. Comment. What can be done to reduce the level of money supply at our end?

Explanation

Increase in money supply causes aggregate demand to go up as consumers tend to spend more or aggregate expenditure goes up. If aggregate supply also increases proportionately, prices do not change, but if increase in aggregate demand is more than increase in aggregate supply it causes inflation. As rational households we should try to reduce money supply. We should avoid huge spending on festivals, weddings,  articles of distinction etc. We should also try to reduce money supply by using public transport, encouraging  car pools etc (it will save our scarce resources.)