MONEY 
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is the price of money, and that the price of 
other things is their purchasing power in 
goods. 
The statement is not infrequently met with 
that the true theory of money is the quantity 
theory. The statement is correct if it is 
interpreted to mean that the fundamental 
proposition laid down in the doctrine known 
as the quantity theory of money is absolutely 
true. But it is not correct if it is interpreted 
to mean that this proposition sums up the 
whole explanation of the exchange value of 
money. As a matter of fact it forms only a 
part of the complete theory. It merely out 
lines the character of the demand for money 
and expresses no opinion as regards supply 
and the relation of this to demand. It is as 
imperfect as a quantity theory of the price 
of fish, or any other reproducible article, 
would be. The quantity theory of money 
declares that the purchasing power of money 
varies inversely as its quantity, and in the 
same proportion. The evidence of its truth 
lies on the surface. In the absence of credit 
money, the extent of the means for buying 
things within a given time may be regarded 
as the number of coins (which we may 
assume to be all of one kind) multiplied by 
their rapidity of circulation within the given