![Mcqmate logo](https://mcqmate.com/public/images/logos/logo-black.png)
![Mcqmate logo](https://mcqmate.com/public/images/logos/logo-white.png)
McqMate
Q. |
In a period of inflation and price rises the supply of money remains - |
A. | the same |
B. | increases |
C. | decreases |
D. | increases or decreases pro-portionately. |
Answer» B. increases | |
Explanation: Money supply is the total amount of monetary assets available in an economy at a specific time. The relation between money and prices is historically associated with the quantity theory of money. There is strong empirical evidence of a direct relation between long-term price inflation and money-supply growth, at least for rapid increases in the amount of money in the economy. |
View all MCQs in
Economics (GK)No comments yet