When the money supply and the price level in countries that experienced hyperinflation are plotted on a graph against time,we see that
A)the price level grew at about the same rate as the money supply.
B)the price level grew at a much faster rate than the money supply.
C)the price level grew at a much slower rate than the money supply.
D)the inflation rate and the money supply growth rate do not appear to be related.

Question

Quizplus · Accepted Answer

In hyperinflation scenarios, the price level typically grows at about the same rate as the money supply due to the direct relationship between the two, as described by the quantity theory of money.

When the Money Supply and the Price Level in Countries