Large or persistent inflation is almost always caused by
A) excessive government spending.
B) excessive growth in the quantity of money.
C) foreign competition.
D) higher-than-normal levels of productivity.

Question

Quizplus · Accepted Answer

Large or persistent inflation is typically caused by excessive growth in the quantity of money which leads to a decrease in the value of the currency. This can result from factors such as high levels of government borrowing, an expansionary monetary policy, or a decline in the exchange rate. Foreign competition and higher-than-normal levels of productivity are unlikely to cause inflation on their own.

Large or Persistent Inflation Is Almost Always Caused by