In the equation of exchange, the level of aggregate expenditures is indicated by
A) MV.
B) $M V / Q$
C) PM.
D) $M V / P .$

Question

Quizplus · Accepted Answer

The equation of exchange is represented as MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is the quantity of goods and services produced (real GDP). Therefore, the level of aggregate expenditures, which is the total amount of spending in the economy, is indicated by MV.

In the Equation of Exchange, the Level of Aggregate Expenditures MV/QM V / QMV/Q

In the Equation of Exchange, the Level of Aggregate Expenditures $M V / Q$