This document discusses the relationship between money supply and inflation. It defines inflation, deflation, and hyperinflation. It then explains that if a central bank increases the money supply too much, it can lead to higher demand for goods and services in the short-run and higher prices or inflation in the long-run. This is consistent with the quantity theory of money, which states that increasing the money supply leads to a proportional increase in nominal GDP and therefore inflation if velocity is held constant. The document shows data on hyperinflation events that demonstrate the close relationship between money supply growth and price increases. It also discusses some costs of inflation.