May 2024
Intermediate to advanced
688 pages
51h 31m
English
Content preview from Business Environment, 1st Edition by Pearson
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Chapter 40: Money: Functions and Value | 519 |
unemployed resources and increase production in the econ-
omy. Additional production will neutralize excess money
and prices will not rise.
(xi) According to Fisher’s formula, if the quantity of money is
doubled, the price level will be doubled and if the quantity
of money is halved, price level will also be halved. It may
be pointed out that such accurate and proportional changes,
as suggested by the formula, occur only under special condi-
tions. In the real world, a doubling in money supply does not
raise the price level exactly by 100 per cent. The rise in the
price level may be more or less ...
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