In the long run, what does the inflation rate primarily depend on?
A) minimum wage
B) government subsidies
C) the money supply growth rate
D) tax rates

Question

Quizplus · Accepted Answer

The inflation rate primarily depends on the money supply growth rate. As the money supply increases, the value of money decreases, resulting in higher prices and an increase in the overall level of inflation. The other options, minimum wage, government subsidies, and tax rates, can impact inflation indirectly but not as significantly as the money supply growth rate.

In the Long Run, What Does the Inflation Rate Primarily