What statement is correct?
A) The money supply does not play a role in sustained inflation.
Eliminate
B) Inflation initiated by an increase in money supply is referred to as demand-pull inflation.
C) Inflation initiated by an increase in aggregate demand because of government spending is referred to as demand-pull inflation.
D) In order to avoid "crowding-out" after the government has increased government spending, the Fed often decreases the money supply in order to lower the interest rates.
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