1. Money Growth and Inflation30
Money Growth and Inflation

2. Figure 1 How the Supply and Demand for Money Determine the Equilibrium Price Level
Value of
Price
money,
Quantity fixed
by the central bank
Money supply 1 / P
level, P
(High) 1
Money
demand 1
(Low) 3 /
1.33 4 A 1 / 2 2
Equilibrium
value of
money
Equilibrium
price level 1 / 4 4
(Low)
(High)
Quantity of
money
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3. Figure 2 An Increase in the Money Supply
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4. Figure 3 Money and Prices During Four Hyperinflations (1)
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5. Figure 3 Money and Prices During Four Hyperinflations (2)
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6. Figure 4 The UK Nominal Interest Rate and the Inflation Rate
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7. Table 1 How Inflation Raises the Tax Burden on Saving
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