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Classical economists assumed that both velocity of money and quantity are constant. Velocity of money is constant because the people’s stable behavior of holding money while quantity is constant because the employment is at full employment. If those assumptions hold then from the equation: MV=PQ, the price level must be proportional to the money supply. In the short run the real Gross National Product will not change hence
P=(V/Q)M
Where V/Q is constant
Dana05 answered the question on August 14, 2019 at 07:24
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