Milton Friedman's proposition that inflation is always and everywhere a monetary phenomenon holds only if
A)government budget deficits do not rise continually.
B)the unemployment rate does not rise continually.
C)the price level rises continually.
D)the United States does not experience more than one negative supply shock per decade.

Question

Quizplus · Accepted Answer

Friedman's proposition states that inflation is caused by an increase in the supply of money relative to the supply of goods and services, therefore, the price level must rise continually as the money supply increases. A and B are not directly related to the proposition and D is too specific.

Milton Friedman's Proposition That Inflation Is Always and Everywhere a Monetary