What statement is correct?
a) the money supply does not play a role in sustained inflation.
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b) inflation initiated by an increase in money supply is referred to as demand-pull inflation.
c) inflation initiated by an increase in aggregate demand because of government spending is referred to as demand-pull inflation.
d) in order to avoid “crowding-out” after the government has increased government spending, the fed often decreases the money supply in order to lower the interest rates.