The quantity theory of money states that as the supply of money increases relative to the demand for money, people will make adjustments in their portfolios of assets. First, they will buy bonds, stocks, and then real assets.

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The quantity theory of money holds that as the supply of money increases relative to the demand for money, people will make adjustments in their portfolio of assets in the order of bonds, stocks, and then real assets.

The Quantity Theory of Money States That as the Supply