The Argument That "Inflation Is Always and Everywhere a Monetary

question 61

Multiple Choice

The argument that "inflation is always and everywhere a monetary phenomenon" is consistent with:

• A) the theory of price confusion.
• B) the quantity theory of money.
• C) the theory of money illusion.
• D) the Fisher effect.

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Definitions:

Current Account

A component of a country's balance of payments that measures the trade of goods and services, net income, and direct transfers with the rest of the world.

Financial Account

A component of the balance of payments that records investment flows and holdings of foreign assets by domestic residents and domestic assets by foreigners.

Official Reserves

Foreign currencies owned by the central bank of a nation.

Balance Of Payments

A document detailing every financial transaction between a country's inhabitants and international entities within a specific timeframe.