Looking at historical evidence for the United States and other countries, which of the following are TRUE?
I.There is a correlation between the growth rate of the quantity theory of money and the growth rate of real GDP.
II.There is a correlation between the growth rate of the quantity theory of money and the inflation rate.

Question

Quizplus · Accepted Answer

This is a well-established economic principle known as the Quantity Theory of Money, which states that the growth rate of the money supply is directly related to inflation. However, there is no established correlation between the growth rate of the money supply and the growth rate of real GDP. Therefore, only statement II is true.

Looking at Historical Evidence for the United States and Other