The argument that "inflation is always and everywhere a monetary phenomenon" is consistent with:
A) the theory of price confusion.
B) the quantity theory of money.
C) the theory of money illusion.
D) the Fisher effect.

Question

Quizplus · Accepted Answer

The statement "inflation is always and everywhere a monetary phenomenon" is consistent with the quantity theory of money, which states that the general price level is directly proportional to the money supply in the economy. This suggests that if the money supply increases, it will lead to inflation. The other choices (A, C, and D) do not directly relate to this statement.

The Argument That "Inflation Is Always and Everywhere a Monetary