The equation of exchange indicates that
A) $M Q \text { equals } V P \text {. }$
B) the velocity of money and the supply of money vary proportionately with one another.
C) other things being equal, an increase in V will increase $P \text { and/or } Q \text {. }$
D) other things being equal, M and P are inversely related.

Question

Quizplus · Accepted Answer

The equation of exchange is $MV = PQ$. If V (velocity of money) increases, then either P (price level) or Q (output) must increase, assuming M (money supply) is constant.

The Equation of Exchange Indicates That A) MQ equals VP. M Q \text { equals } V P \text {. }MQ equals VP.

The Equation of Exchange Indicates That
A) $M Q \text { equals } V P \text {. }$