In Fisher's transaction velocity model, one of the following is not an assumption:
A)Velocity of circulation of money is constant
B)The volume of transactions is constant
C)Full employment
D)P is considered as an active factor

Question

Quizplus · Accepted Answer

In Fisher's transaction velocity model, P (the price level) is considered a passive factor, adjusting to changes in the other variables like the quantity of money, the velocity of circulation, and the volume of transactions. The model assumes that the velocity of circulation and the volume of transactions are constant, and it does not necessarily assume full employment.

In Fisher's Transaction Velocity Model, One of the Following Is