Question

the primary cause of inflation is growth in the quantity of money. variability in relative prices. inter - bank lending. reduced velocity of money.

Explanation:

According to the quantity - theory of money, an increase in the quantity of money is the primary cause of inflation. When there is more money in circulation relative to the amount of goods and services available, the general price level rises. Variability in relative prices is not the main cause of overall inflation. Inter - bank lending mainly affects the short - term liquidity in the banking system and not the primary cause of inflation. A reduced velocity of money would tend to have a deflationary or anti - inflationary effect rather than causing inflation.

Answer:

growth in the quantity of money.