Quantity Theory of Money - Macro 2.5

The video tutorial explains the quantity theory of money, focusing on the relationship between money supply, velocity of money, and nominal GDP. It highlights how changes in money supply and velocity can impact price levels and nominal GDP, assuming constant velocity and real GDP. The tutorial uses Zimbabwe's hyperinflation as an example to illustrate the consequences of excessive money printing, emphasizing the importance of understanding this economic concept.

What does 'M' represent in the quantity theory of money?

Explain the relationship between the money supply and the price level according to the quantity theory of money.

What happens to the price level if the money supply is increased while keeping the velocity of money and real GDP constant?

Discuss the implications of continuously increasing the money supply as seen in the example of Zimbabwe.

What is the significance of understanding the quantity theory of money in relation to national debt?