Price inflation occurs when the quantity of money in circulation rises faster than the stock of goods and services.

Question

Quizplus · Accepted Answer

Price inflation occurs when there is too much money chasing too few goods, which results in an increase in prices. This usually happens when there is an increase in the money supply, but the available goods and services do not increase proportionally. Therefore, the statement is true.

Price Inflation Occurs When the Quantity of Money in Circulation