Use the quantity equation, MV = PY, to answer the following questions.
Define and fully explain what each term in the quantity equation represents.
Represent the quantity equation relationship in growth rates.
Explain what drives each of the four growth rates in the equation from b.
Milton Friedman once said “inflation is always and everywhere a monetary phenomenon”. Explain what he meant by this using the answer in part 2b. You may assume velocity is constant (but explain why this assumption makes sense). [hint: he did NOT mean that inflation is inevitable or inescapable, it is not]