The quantity theory of money
A)is a fairly recent addition to economic theory.
B)can explain both moderate inflation and hyperinflation.
C)argues that inflation is caused by too little money in the economy.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The quantity theory of money can explain both moderate inflation and hyperinflation. It argues that inflation is caused by too much money in the economy. The theory has been around since the 16th century, so option A is incorrect. Option C is incorrect as it states the opposite of what the theory argues.

The Quantity Theory of Money