Critical Analysis of Quantity Theory of Money

In the following lines, Quantity theory of money is critically analyzed:

Analysis of Assumption in the theory:

Following are the assumptions upon which this theory is based:

• Quantity of money changes, but not the velocity of money, whereas; velocity of money also changes and brings the same result as if quantity of money changed.
• Quantity of money influences prices but the reverse is not true. In other words, quantity of money determines the level of prices. But, prices are affected by many other factors than just the quantity of money.
• Full employment prevails in the economy. This does not happen in the real world.
• Velocity of money remains constant which is not possible.