An increase in the inflation rate in the long run only occurs with an increase in money growth.

Name: An increase in the inflation rate in the long run only occurs with an increase in money growth.
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Question

Quizplus · Accepted Answer

According to the Quantity Theory of Money, an increase in the money supply will lead to an increase in the price level, which is measured by the inflation rate. Therefore, in the long run, an increase in the inflation rate only occurs with an increase in money growth.

An Increase in the Inflation Rate in the Long Run