If the output of goods and services is not growing at a similar rate, inflation will eventually occur.

Discussion

Your book describes the increase in the U.S. money supply as being analogous to giving people more money. If the output of goods and services is not growing at a similar rate, inflation will eventually occur. According to PPP theory, what will happen to the U.S. dollar? Why? Explain your answer in a well-constructed and persuasive manner.

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If the output of goods and services is not growing at a similar rate inflation will eventually occur.

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