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Money and Output Relationship

Describe the current thinking about the relationship between money and output.

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Relationship between money and output:
1. An increase in the supply of money leads to an increase in output. There is a non linear relationship between money and output.
2. Increase in supply of money leads to an increase in prices, increase of money wages, employment and so output.
3. On the other hand once the employees realize that the increase in money wages is matched by an increase in prices ...

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