The quantity theory of money is consistent with economist Milton Friedman's argument that "inflation is always and everywhere a monetary phenomenon."

Question

Quizplus · Accepted Answer

The quantity theory of money asserts that the price level is determined by the quantity of money in circulation. According to this theory, if the money supply grows faster than the output of goods and services, then inflation will occur. Milton Friedman famously stated that "inflation is always and everywhere a monetary phenomenon," which is consistent with the quantity theory of money. Therefore, the answer is A.

The Quantity Theory of Money Is Consistent with Economist Milton