What Did Milton Friedman Mean by Saying That "Inflation Is

question 58

Multiple Choice

What did Milton Friedman mean by saying that "inflation is always and everywhere a monetary phenomenon"?

• A) Inflation only affects those who hold money,as savings or in the form of investments.
• B) Inflation is due to cash transactions,not transactions based on credit.
• C) In any economy that uses money as a medium of exchange,there will always be some inflation.
• D) Inflation is about rising prices,not about rising productivity.
• E) Inflation is caused by an increase in the money supply relative to the quantity of goods and services.

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Definitions:

Hydraulic

Hydraulic systems use pressurized fluid to power devices or machinery, transferring energy through the controlled movement and pressure of a liquid, typically oil or water.

Mechanical Force

A push or pull action resulting from the interaction of physical objects, which can cause an object to move, stop, or change direction.

Torque Converter

A type of fluid coupling that allows the engine to spin somewhat independently of the transmission, used in automatic transmissions to improve smoothness.

Hydrodynamics

The science of forces acting on, or exerted by, liquids, usually, but not always, in confined circuits.