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In a period of inflation and price rise the supply of money remains
-
- the same
- increases
- decreases
- increases or decreases proportionately.
- the same
Correct Option: B
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.
