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Quantity Theory of Money |
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Quantity Theory of Money The idea that the amount of money in an economy directly correlates to the price of goods and services. According to this theory, more money in an economy results in higher prices. Nearly all economists agree with the quantity theory of money in the long run, but there is significant disagreement over how true it is in the short term. There is also disagreement over what kinds of money (cash, notes or others) affect prices. The quantity theory of money is a major component of monetarism. See also: Real bills doctrine. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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