That's nominal GDP, which is not constant for an inflating currency.

All models are wrong. Some models are useful.

One of the problems with this model is that it's static. People make decisions based on expectations. If you expect your money to be worth less in the future, you are more likely to trade it for valuable stuff.

If GDP were to stay constant during a monetary expansion, the explanation would be that velocity decreased. This is what seems to have happened during the QE's. We didn't see rapid price increases, like many expected, because banks didn't loan that money out into the economy.