Inflation is a long-term phenomenon caused by a too rapid growth in the money supply.
Use the quantity theory of money in defense of your answer. In order to determine the veracity of the above statement, it is helpful to first discuss the quantity theory of money. The quantity theory of money emphasizes that the money supply is the main determinant of nominal gross domestic product. To understand this theory, the equation of exchange must first be examined. The left hand side of the equation represents the amount spent on final goods and services while the right hand side represents the amount received for these final goods and services.