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To: politicket

The general price level cannot rise if money supply does not increase. More money for some goods means less for others if available money is constant.


13 posted on 01/17/2022 8:18:50 AM PST by AndyJackson
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To: AndyJackson

“The general price level cannot rise if money supply does not increase. “

Yes it can. MV=PQ.

M - money
V - velocity of money
P - price
Q - quantity of goods.

If the velocity of money increases (spending vs saving increases) then you can have price inflation even if the money supply remains the same.

And in inflationary times like we now have people are more eager to hoard stuff before prices go even higher. Hence velocity increases - which in turn leads to even higher prices.


92 posted on 01/17/2022 9:36:37 AM PST by aquila48 (Do not let them make you "care" ! Guilting you is how they control you. )
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