To explain the long-run determinants of the price level and the inflation rate, most economists today rely on the
A)quantity theory of money.
B)price-index theory of money.
C)theory of hyperinflation.
D)disequilibrium theory of money and inflation.

Question

Quizplus · Accepted Answer

Most economists today rely on the quantity theory of money to explain the long-run determinants of the price level and the inflation rate. This theory posits that the amount of money in an economy determines the value of money, with increases in the money supply leading to inflation.

To Explain the Long-Run Determinants of the Price Level and the Inflation