The Quantity Theory of Money Predicts That the Main Cause

question 35

Multiple Choice

The quantity theory of money predicts that the main cause of inflation is increases in:

• A) prices.
• B) real output.
• C) consumption.
• D) the money supply.

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Definitions:

Medicare

A federal health insurance program in the United States primarily for people aged 65 and older, but also available to some younger individuals with disabilities.

Medigap

Private insurance that Medicare recipients can purchase to reduce the gap in coverage—the amount they would have to pay from their own pockets after receiving Medicare benefits.

Relative Value

A measure of the worth of something in comparison to the price, quantity, or value of another item or measure.

Prepayment

The act of paying for goods, services, or expenses in advance before receiving or using them.