Based on Fisher’s formula, name the main reasons for the rise in inflation.

The exchange formula also shows that the overflow of the money circulation channels can occur if the velocity of money circulation increases. The same consequences can be caused by a decrease in the supply of goods on the market (a drop in production). For the price level in the economy to remain stable, the government must maintain the growth rate of the money supply at the level of the average growth rate of real GDP.

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