Evidence strongly supports the view that countries with high inflation also have
A)the lowest nominal interest rates.
B)the highest rates of money growth.
C)the smallest budget deficits.
D)the lowest interest rates.

Question

Quizplus · Accepted Answer

High inflation often results from excessive money growth, as more money in circulation decreases its value. Therefore, countries with high inflation tend to have higher rates of money growth. A, C, and D are not strongly correlated with inflation.

Evidence Strongly Supports the View That Countries with High Inflation