quantity theory

noun

1. economics a theory stating that the general price level varies directly with the quantity of money in circulation and the velocity with which it is circulated, and inversely with the volume of production expressed by the total number of money transactions

Example Sentences

Quantity theory breaks down with Johnson.

From The Guardian

To understand the central bank, you need to understand the effect of reserve requirements, how buying and selling bonds affects the discount rates, and the quantity theory of money.

From Salon

The notion that the Fed massively buying government debt, in effect monetizing a portion of it, is always automatically inflationary, is based on the classical quantity theory of money and it is simply wrong as we can now see from the evidence of the past six years.

From New York Times

But just as Keynes struggled to escape from the grip of the quantity theory of money we have struggled to escape from the grip of conventional wisdom about debt management and monetary and fiscal policy.

From New York Times

As Keynes had pointed out that Quantity Theory of Money works only at Full Employment.

From Economist