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#21
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[ QUOTE ] [ QUOTE ] [ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] Deflation is a decrease in M, not a decrease in P. [/ QUOTE ] If you are talking about deflating the money supply then it is, but under a gold standard the money supply would be relatively stable no? [/ QUOTE ] No, the money supply is relative to the total amount of goods and services you can buy with that money. Increasing that while keeping the same number of dollars is a drop in M. [/ QUOTE ] Uhhh no. M is the currency in circulation as defined by M1, M2, M3. It is an absolute number, not relative to anything. |
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