The equation of exchange states that the quantity of money multiplied by the velocity of money equals _____
A) the real gross domestic product.
B) the price level.
C) the nominal gross domestic product.
D) the turnover rate.
E) the demand for money.

Question

Quizplus · Accepted Answer

The equation of exchange is represented as MV = PQ, where M is the quantity of money, V is the velocity of money, and PQ represents the nominal gross domestic product (GDP), with P being the price level and Q being the real GDP.

The Equation of Exchange States That the Quantity of Money