Homework SourseIf the institutionalist theory of inflation is correct then
If the institutionalist theory of inflation is correct, then:
| money supply increases are a necessary, but not causal, link in the inflationary process. |
Solution
If the intitutionalist theory of inflation is correct, then people are often fooled into thinking an increase in nominal demand is actually an increase in real demand.
So, the correct answer is an option (C).
