Between 1960 and 1990,Argentina's money supply grew at approximately 80%.According to the quantity theory of money,inflation rates in Argentina should have been approximately _____ during this period.

Question

Quizplus · Accepted Answer

The quantity theory of money suggests that if the money supply in an economy grows at a certain rate, the price level (and thus the inflation rate) should grow at a similar rate, assuming velocity of money and output remain constant. Therefore, if Argentina's money supply grew at approximately 80%, the inflation rate should have been approximately 80% as well, according to this theory.

Between 1960 and 1990,Argentina's Money Supply Grew at Approximately 80