by Frank Shostak
According to popular thinking, not every increase in the supply of money will have an effect on the production of goods. For instance, if an increase in the supply is matched by a corresponding increase in the demand for money, then there will be no effect on the economy. The increase in the supply of money is neutralized, so to speak, by an increase in the demand for money or the willingness to hold a greater amount of money than before.
What do we mean by demand for money? In addition, how does this demand differ from the demand for goods and services?