00:02
Hello students, so let's take an hypothetical situation and we will be further discussing on that.
00:10
The situation is such that the central bank decides to print as much money as they want.
00:28
So let's discuss what would be the impact of printing so much of notes.
00:37
So if the central bank prints a large amount of.
00:41
Money so then it would definitely increase the money supply in the country which would ultimately lead to increasing the liquidity of currency in the country liquidity will increase along with this the consumers purchasing power parity will increase consumer purchasing power will increase as they will have more money in their hands the velocity of currency circulation an economy will increase, the price levels of the goods will increase because the supply would remain the same but the demand would be high.
01:25
So the price level of the products will increase.
01:28
So this would ultimately result in a situation of inflation and that would cause an ultimate chaos in the country, resulting inflation in an economy.
01:44
So, if we have to use the quantity theory of money or using the concept of quantity of money, how the situation can be analyzed in the short run, quantity of money, in short run and in long run...