In the long-run,the inflation rate will move very closely with ________.

Question

Quizplus · Accepted Answer

In the long-run, the quantity theory of money suggests that the inflation rate is primarily determined by the growth rate of the money supply. This is because an increase in the money supply will eventually lead to an increase in prices as people have more money to spend and demand for goods and services increases. Other factors, such as changes in government debt, government expenditures, and tax rates, may have short-term effects on inflation, but in the long-run, they are not as closely related to inflation as the growth rate of the money supply.

In the Long-Run,the Inflation Rate Will Move Very Closely with ________