Economics · Quantity Theory of Money
Fisher's equation of exchange (MV = PT) establishes a:
- 1Inverse and proportionate relationship between money supply and prices
- 2Direct and proportionate relationship between money supply and price level✓
- 3Inverse relationship between money supply and prices
- 4Direct but non-proportionate relationship between money supply and prices
Correct answer
Direct and proportionate relationship between money supply and price level
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