History shows that:

Question

History shows that:

Quizplus · Accepted Answer

History has shown that countries with high rates of money growth tend to have high rates of inflation. This is because when more money is introduced into the economy, the value of each unit of currency decreases, leading to higher prices for goods and services. Conversely, countries with low rates of money growth tend to have lower rates of inflation because there is less currency in circulation, leading to a more stable value of each unit of currency. Option A is incorrect because low money growth rates are associated with low inflation rates, not high rates. Option B is incorrect because there is a well-established relationship between money growth and inflation. Option D is incorrect because money growth rates do not necessarily equal inflation rates; other factors can influence the overall level of inflation in an economy.

History Shows That