If there were 100 horses and 300 cows in the market, each horse would be worth three cows since there are three times as many cows as horses. However if the supply of horses increased to 150, then the ratio of horses to cows would decrease to 2 cows per horse. The larger supply would drop the value of a horse to two cows from three cows. The Law of Supply equally applies in monetary systems. Stay the same . .
Prices decrease . .
Prices increase . .