Tomas receives monthly wages of $1,500 and government transfers of $200 per month, and pays income and sales tax of $170. tomas's disposable income is a month.

Which of the following statements best describes the quantity theory of inflation? a.inflation occurs because production cost rise and this cost increase is passed on to consumers in the form of higher prices b. inflation occurs because there is too much money in the economy c. inflation occurs because demand of good and services exceeds existing supplies d. none of these