Milton Friedman's assertion that "inflation is a monetary phenomenon" is based on:
A. the assumption of constant nominal GDP growth.
B. the assumption that the price level grows at the same rate as real GDP.
C. the quantity theory of money.
D. the assumption that the central bank increases the money supply by a constant rate every year.
Answer: C
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An important type of information asymmetry is:
A. ethical constraint. B. advantage imbalance. C. information withholding. D. moral hazard.
Let's assume producers in Canada can make 200 units of beef or 50 units of oranges, and U.S. producers can make 50 units of beef or 200 units of oranges per time period. Producers in which nation have an incentive to specialize in beef production?
A) The U.S. B) Canada C) Both of the above have an incentive to specialize in beef production. D) Neither of the above have an incentive to specialize in beef production.