Whatever the permanent supply of money may be, it will adapt itself to the social needs for money. A given quantity of money, say 10a:, effects the exchanges of a country. If this quantity were increased to 12a:, we know, speaking generally, that the new amount (12a;) will be used in effecting the same kinds and number of exchanges as 10a: had formerly effected. Thus, in each exchange twenty per cent more money will be used than was the case before the increase - that is, goods in every case will command more money when the quantity is 12a: than when the quantity was 10x Measured in terms of goods, the value of money has declined. We may now state the quantity theory of money: Other things being equal, the value of the money unit varies inversely with the supply of money.