What did Milton Friedman mean by saying that "inflation is always and everywhere a monetary phenomenon"?
A) Inflation only affects those who hold money,as savings or in the form of investments.
B) Inflation is due to cash transactions,not transactions based on credit.
C) In any economy that uses money as a medium of exchange,there will always be some inflation.
D) Inflation is about rising prices,not about rising productivity.
E) Inflation is caused by an increase in the money supply relative to the quantity of goods and services.

Question

Quizplus · Accepted Answer

Milton Friedman's statement means that inflation is primarily caused by an increase in the money supply relative to the quantity of goods and services available in the economy. Therefore, increasing the money supply without a corresponding increase in output will lead to inflation. This is because as the money supply grows, the value of each unit of currency decreases, causing prices to rise.

What Did Milton Friedman Mean by Saying That "Inflation Is