Question

what relationship does the theory established between price level and money supply​

Answer 1

Answer:

Change in money supply result in change in price level.

Explanation:

An increase in the money supply results in decrease in the value of money as it increase the rate of inflation and vice versa.

Answer 2

Answer:

$\underline{\huge{\boxed{ANSWER:}}}}$

Explanation:

<marquee>In monetary economics, the quantity theory of money (QTM) states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply</marquee>