In the quantity theory of money, the growth of ________ is the cause of inflation.
A) the money supply
B) velocity
C) real GDP
D) the CPI

Name: In the quantity theory of money, the growth of ________ is the cause of inflation. A) the money supply B) velocity C) real GDP D) the CPI
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Question

Quizplus · Accepted Answer

The quantity theory of money states that the general price level is directly proportional to the money supply. Therefore, an increase in the money supply causes inflation.

In the Quantity Theory of Money, the Growth of ________