In the long run, which of the following depends primarily on the growth rate of the money supply?
A)the natural rate of unemployment and the inflation rate
B)the natural rate of unemployment but not the inflation rate
C)the inflation rate but not the natural rate of unemployment
D)neither the natural rate of unemployment nor the inflation rate

Question

Quizplus · Accepted Answer

In the long run, the inflation rate primarily depends on the growth rate of the money supply, according to the quantity theory of money. The natural rate of unemployment is determined by factors such as labor market policies and technology, not the money supply.

In the Long Run, Which of the Following Depends Primarily