The institutionalist theory of inflation differs from that of the quantity theory by focusing on:
A)how firms determine wages and prices.
B)the equation of exchange.
C)the rate of growth in the money supply.
D)the institutions that determine how the money supply is determined.

Question

Quizplus · Accepted Answer

The institutionalist theory of inflation emphasizes the role of firms and institutions in setting wages and prices, rather than focusing solely on the money supply as in the quantity theory.

The Institutionalist Theory of Inflation Differs from That of the Quantity