On the long-run, doubling M will double P.

Name: On the long-run, doubling M will double P.
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In the context of the quantity theory of money, which posits a direct relationship between the money supply (M) and the price level (P) in the long run, doubling the money supply (M) will, all else being equal, lead to a doubling of the price level (P). This is based on the equation of exchange (MV = PQ), assuming velocity (V) and output (Q) are constant.

On the Long-Run, Doubling M Will Double P