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View Diary: Where is the Hyper-Inflation (22 comments)

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  •  Bidding up prices won't be a problem until the (0+ / 0-)

    economy is operating much much closer to full capacity or employment.  If the extra money that is created goes towards increasing the number of goods and services (by bringing down the unemployment rate) than both sides of the equation rise and the price will stay stable.

    Or so goes the quantity theory of money
    M x V = P x Q
    M = money supply
    V = velocity of money
    P = general price level
    Q = Quantity of goods and services for sale

    "The Earth is my country and Science my religion" Christiaan Huygens

    by Auburn Parks on Mon Apr 29, 2013 at 05:26:42 AM PDT

    [ Parent ]

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