Inflation occurs when
A) the quantity of money in circulation rises faster than the stock of goods and services.
B) the stock of goods and services increases and the quantity of money in circulation decreases.
C) output increases faster than the money supply.
D) the money supply decreases and the output increases.

Question

Quizplus · Accepted Answer

Inflation is a monetary phenomenon. It occurs when the quantity of money in circulation rises faster than the stock of goods and services, that is, when the money supply increases faster than output increases.

Inflation Occurs When