Answer to Question #261445 in Macroeconomics for peter

Question

The research concluded that too much money supply growth for too long results eventually in higher rates of inflation suggests that: (a) there is a certain, long-term relationship between money supply growth and inflation that can be estimated precisely;(b) the relationship between money supply growth and inflation, while discoverable, is also highly variable; (c) the relationship between money supply growth and inflation is immediate and fast-acting; (d) appropriate monetary policy can bring the inflation rate to the Fed’s target level with precision over the long-term.

Answer 1

(a) there is a certain, long-term relationship between money supply growth and inflation that can be estimated precisely

Too much money supply needs to be only for a short period