# Quantity theory of money and inflation

To what extent does the quantity theory of money provide a realistic view of inflation?

Â© BrainMass Inc. brainmass.com March 4, 2021, 5:38 pm ad1c9bdddfhttps://brainmass.com/economics/inflation/quantity-theory-money-inflation-3877

#### Solution Preview

Quantity Theory of Money: A theory that states a given percentage change in the money supply leads to an equal percentage change in nominal gross domestic product.

This theory is derived from the "equation of exchange": M*V = P*Q, where M is the money supply, V is the ...

#### Solution Summary

The solution explains the extent to which the quantity theory of money provides a realistic view of inflation. It is detailed and goes into a fair amount of detail about the quantity theory of money. This ideal for students who want to clearly understand the quantity theory of money and its impact on inflation.

$2.19