If the quantity theory of money holds,then in an economy,then ________.
A) Inflation = Growth rate of money supply + Growth rate of real GDP
B) Inflation = Growth rate of money supply ‒ Growth rate of real GDP
C) Inflation = Growth rate of money supply + Growth rate of nominal GDP
D) Inflation = Growth rate of money supply ‒ Growth rate of nominal GDP

Question

Quizplus · Accepted Answer

The quantity theory of money suggests that inflation is equal to the growth rate of the money supply minus the growth rate of real GDP. This is because inflation is essentially the result of too much money chasing too few goods.

If the Quantity Theory of Money Holds,then in an Economy,then