In the Long Run, the Inflation Rate Depends Primarily on the Growth

question 163

True/False

In the long run, the inflation rate depends primarily on the growth rate of the money supply.

---

Definitions:

Relative-price Variability

The fluctuation in prices of goods and services relative to each other over time, often influenced by various economic factors.

Misallocation

The inefficient distribution or use of resources, often leading to suboptimal economic outcomes.

Nominal Gain

The increase in the monetary value of an asset or investment without adjusting for inflation, representing a simple difference in price.

Real Gain

The increase in value or profit after adjusting for inflation or other external factors that affect purchasing power.