The quantity theory of money emphasizes
A)Government taxation policies
B)Government spending policies
C)Labor productivity
D)Changes in the money supply
E)None of the above

Question

Quizplus · Accepted Answer

The quantity theory of money focuses on the relationship between changes in the money supply and changes in the price level. It suggests that an increase in the money supply leads to an increase in prices, assuming all other factors remain constant. Therefore, changes in the money supply are the most important factor emphasized in the quantity theory of money.

The Quantity Theory of Money Emphasizes