The quantity theory of money asserts that inflation is the result of growth in
A) the quantity of money.
B) potential GDP.
C) the natural rate of unemployment.
D) money wage rates.

Question

Quizplus · Accepted Answer

The quantity theory of money posits that inflation is primarily caused by increases in the quantity of money in circulation. According to this theory, when more money is available, prices tend to rise if the supply of goods and services does not increase at the same rate.

The Quantity Theory of Money Asserts That Inflation Is the Result