Which of the following is not a factor in the equation of exchange?
A) Money velocity
B) Money supply
C) The price level
D) Nominal income

Question

Quizplus · Accepted Answer

Nominal income is not a factor in the equation of exchange, which is MV = PQ (where M is the money supply, V is the velocity of money, P is the price level, and Q is the real output or quantity of goods and services exchanged). Nominal income can be derived from other variables in this equation, but it is not a direct factor.

Which of the Following Is Not a Factor in the Equation