(also the quantity theory of money)
Definition of quantity theory in English:
noun[mass noun] Economics
The hypothesis that changes in prices correspond to changes in the monetary supply.
- If these two variables were assumed to remain constant, then the simple quantity theory would predict the price level to change in proportion to a change in the money supply.
- The correlation between price level and money supply is determined by the quantity theory of money.
- Traditionally, classical economists supported the quantity theory of money as explaining price levels.
Definition of quantity theory in:
- US English dictionary