What does the evidence from hyperinflations indicate with respect to the quantity theory of money?
A) Evidence shows that money growth and inflation moved together, which supports the quantity theory.
B) Evidence shows that money growth and inflation moved together, which does not support the quantity theory.
C) Evidence shows that money growth and inflation did not move closely with each other, which supports the quantity theory.
D) Evidence shows that money growth and inflation did not move closely with each other, which does not support the quantity theory.

Question

Quizplus · Accepted Answer

The evidence from hyperinflations shows that there was a close relationship between money growth and inflation. This supports the quantity theory of money, which suggests that inflation is caused by an increase in the money supply. Therefore, Choice A is the best answer.

What Does the Evidence from Hyperinflations Indicate with Respect to the Quantity