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Business
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According to monetarists, in the long run, if money supply growth is faster that the growth in potential real GDP (with velocity remaining stagnant) then we will experience inflation. Prices are inflexible in the short term, meaning that it takes time for prices to change (especially for them to decrease), so in the short term M would likely have an effect on Q...
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According to monetarists, in the long run, if money supply growth is faster that the growth in potential real GDP (with velocity remaining stagnant) then we will experience inflation. Prices are inflexible in the short term, meaning that it takes time for prices to change (especially for them to decrease), so in the short term M would likely have an effect on Q...
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