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High inflation rates are inevitably accompanied by high money supply growth and low inflationary expectations a....

High inflation rates are inevitably accompanied by high money supply growth and low inflationary expectations

a. true

b. false

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Answer #1

“High inflation rates are inevitably accompanied by high money supply growth and low inflationary expectations”, The statement is False.

The statement is false because high inflation rate in accompanied by high money supply growth and high inflationary expectations. When money supply growth is higher than growth in real output the inflation will rise and when economic agents expects higher inflation, the result will be increase in Aggregate Demand causing increase in price level and output.

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