According to the quantity theory, in the long run, an increase in the growth rate of leads to an increase in the .
A) the quantity of money; growth rate of real GDP
B) the quantity of money; inflation rate
C) real GDP; growth rate of velocity
D) real GDP; inflation rate

Question

Quizplus · Accepted Answer

According to the quantity theory of money, in the long run, the growth rate of money is directly proportional to the inflation rate. Therefore, an increase in the growth rate of money will ultimately lead to an increase in the inflation rate.

According to the Quantity Theory, in the Long Run, an Increase