The equation of exchange is
A)quantity supplied equals quantity demanded
B)quantity bought equals quantity sold
C)M × V = P × Y
D)C × I + G = Y
E)input equals output

Question

Quizplus · Accepted Answer

The equation of exchange, also known as the quantity theory of money, is represented by the formula M × V = P × Y. This equation shows the relationship between the supply of money, velocity of money, price level, and real output. M refers to the money supply, V refers to the velocity of money, P refers to the price level, and Y refers to real output.

The Equation of Exchange Is