What theory did Fisher develop related to money?
Quantity theory of money
Supply and demand
Game theory
Behavioral economics
Answer
The quantity theory of money, developed by Irving Fisher, posits that the price level of goods and services is directly proportional to the quantity of money in circulation. In other words, an increase in the money supply leads to inflation, while a decrease leads to deflation. This theory emphasizes the role of money in determining the overall price level and highlights the importance of monetary policy in managing inflation.
Irving Fisher Trivia: 31 Questions to Test Your Memory
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