According to the quantity theory of money and prices, a 2 percent increase in the money supply ultimately leads to

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According to the quantity theory of money and prices, there is a direct relationship between the money supply and the price level in the long run. Therefore, a 2 percent increase in the money supply would lead to a 2 percent increase in the price level. The theory does not suggest any direct impact on real GDP, wages, or velocity.

According to the Quantity Theory of Money and Prices, a 2