What does the quantity theory speculate about the cause of inflation?

a. when there's a lot of currency in circulation, inflation can occur

b. when a good decreases in value, its price will rise and inflation can occur

c. when increased costs provoke producers to raise prices, inflation can occur

d. when demand for goods and services exceeds the supply available inflation can occur

Question

Guadalupe Ramsey

Business

30 January, 21:04

What does the quantity theory speculate about the cause of inflation?

a. when there's a lot of currency in circulation, inflation can occur

b. when a good decreases in value, its price will rise and inflation can occur

c. when increased costs provoke producers to raise prices, inflation can occur

d. when demand for goods and services exceeds the supply available inflation can occur

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Answers (1)

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Gunner Fernandez · Answer 1

The quantity theory speculates about the cause of inflation that i A) when there's a lot of currency in circulation, inflation can occur.

According to this theory, when there is a lot of money just circulating around, that is when inflation can happen.