In the long run,inflation is caused by
A) global warning.
B) greedy monopolists.
C) the tradeoff between aggregate output and inflation.
D) aggressive labour unions.
E) growth in the money supply.

Question

Quizplus · Accepted Answer

Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. One major cause of inflation in the long run is growth in the money supply. When there is a significant increase in the amount of money circulating in the market, consumers have more money to spend, causing an increase in demand for goods and services. This increase in demand pushes prices up, leading to inflation. Therefore, choice E is the best answer.

In the Long Run,inflation Is Caused by