If money supply increases, P will rise as long as V and Q remain constant.

Name: If money supply increases, P will rise as long as V and Q remain constant.
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Question

Quizplus · Accepted Answer

According to the Quantity Theory of Money, an increase in money supply, with constant velocity and output, will lead to a proportionate increase in the general price level (P). Therefore, if V and Q remain constant, P will rise as the money supply increases.

If Money Supply Increases, P Will Rise as Long as V