According to the quantity theory of money, inflation is caused by
A) the money supply growing slower than real GDP.
B) GDP growing faster than the money supply.
C) GDP growing at the same rate as the money supply.
D) the money supply growing faster than real GDP.
Answer: D
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Which of the following must decline if there is a reserve deficiency in the banking system?
A) Demand deposits B) Reserves C) Net worth D) The demand deposit multiplier
If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium
a. True b. False Indicate whether the statement is true or false
Per capita GDP will definitely fall when
A. Population increases. B. The labor force decreases. C. The population growth rate exceeds the economic growth rate. D. GDP decreases.
A perfectly competitive firm is maximizing profits in the short run. This implies that the firm is earning the most economic profits possible, which
A) must be positive. B) must be either zero or positive. C) can be positive, negative, or zero. D) exist at the point at which price equals total cost.