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Sholpan [36]
3 years ago
11

Question 16 (2 points)

English
1 answer:
Paraphin [41]3 years ago
3 0

Answer:

hermia

Explanation:

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(a) Explain the quantity theory and (b) how does the theory explains the cause of inflation​
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Answer:

Kindly check explanation

Explanation:

The quantity theory generally represented by the formula:

MV = PT

Where ;

M, money supply, that is monet in the economy

V, velocity of money, which shows the rate at which money is used to obtain a finished product.

P ; average price level

T ; volume of transactions, good and services transacted in. the economy

​

The quantity theory explains how variation in the quantity of money in circulation within an economy causes variation in the price level of goods and services.

B.)

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