Fisher's Effect and Multilpliers effect (Money Supply)?

Question

Part 1.
Creation of money or money supply results in higher inflation.
Most the money is created through multiplier's effect that involves the creation of debt (ref: fractional reserve banking). Does that not mean the more debt lend by Washington and London based international financial instituitons, the higher should the inflation be?
Part 2
What influence has higher degree of lending on the inflation rates in a country spcially during a consumer boom?

Answer 1

Inflation has been a serious problem several times in our history. The 1970's were terrible. The Federal Reserve sent interest rates sky high in 1981 to deal with it. It was a lot of pain, but inflation fell to reasonable levels.

As for your question.....high debt will affect inflation and interest rates. In Japan....the debt is controlled, and interest is .5%.

Generous lending, during a recession is very good to boost the economy. When the economy is booming, interest needs to be seriously controlled to keep infaltion in check.

Answer 2

You either taking Money and Banking or Financial Markets and Institutions. Either way you should answer these on your own. Here is a bit of an answer Part 1 - not necessary, look at the supply and demand analysis of money. Part 2 - This is tied to part one. Both can be answered using the supply and demand analysis of money and balance of pmts accounts.