The Relationship Between Money Growth Rates and Inflation Between 1982

question 54

Multiple Choice

The relationship between money growth rates and inflation between 1982 and 2010 helps explain why, by the 1990s, most economists had

• A)adopted the monetarist explanation of inflation.
• B)adopted a rules-only approach to monetary policy.
• C)become more convinced of the monetary causes of inflation.
• D)abandoned monetarism as the primary explanation of inflation.

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Definitions:

Firms

Businesses or companies engaged in commercial, industrial, or professional activities, aiming to generate profits.

Tangible Capital

Physical assets owned by a person or company that are used in the production or supply of goods and services.

Intangible Capital

Nonmaterial things that contribute to the output of future goods and services.

Production

The method of producing goods and services by merging labor, land, and capital.