Determine the velocity of circulation, Macroeconomics

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The demand for nominal balances rises with the price level. At the similar time inflation causes the real demand for money to fall. Describe how these two assertions can be both correct.

Present a brief exposition on the quantity theory of money. Recognize the assumptions associated with it and interpret them.

Describe the relationship between money supply, velocity of circulation, price level and volume of economic transaction.

Discuss the significance of the constancy of velocity of circulation of money.

 


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