The quantity theory of money predicts that,in the long run,inflation results from the

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The quantity theory of money states that the price level is directly proportional to the money supply, and in the long run, inflation occurs when the money supply grows at a faster rate than real GDP. This is because an increase in the money supply without a corresponding increase in output leads to an excess of money in the economy, which leads to higher prices as people compete to spend their money.

The Quantity Theory of Money Predicts That,in the Long Run,inflation