Looking at historical evidence from 1990 to 2005 for the United States and other countries, which of following are true?
I. There is a correlation between the growth rate of the quantity theory of money and the growth r of real GDP.
II. There is a correlation between the growth rate of the quantity theory of money and the inflation
A) Only II is true.
B) Only I is true.
C) Both I and II are true.
D) Neither I or II is true.

Question

Quizplus · Accepted Answer

The quantity theory of money suggests a direct relationship between money supply growth and inflation, which is supported by historical evidence. However, the correlation between money supply growth and real GDP growth is not consistently observed.

Looking at Historical Evidence from 1990 to 2005 for the United