True or false?
You should have answered false because the question vastly overstates the case being made. It is true that there is a very strong positive relationship, on average, between nominal money growth and inflation but the relationship is not a tight one. Nor should we expect it to be tight. In cases where growth of the money supply is not large its effect on the price level is often substantially moderated by changes in the demand for money. In cases where money growth is large, say greater than 15 percent per decade, we do observe a very strong positive relationship, loosely one-to-one, between money growth and the growth of the consumer price index.