As approached through the quantity theory of money,aggregate demand is derived from
A)the equation of exchange.
B)its three component parts: consumer expenditure,investment spending,and government spending.
C)its four component parts: consumer expenditure,investment spending,government spending,and net exports.
D)the spending multiplier.

Question

Quizplus · Accepted Answer

The quantity theory of money posits that the general price level in an economy is directly proportional to the amount of money in circulation, and that aggregate demand is derived from the equation of exchange, which relates the money supply to the values of goods and services bought and sold. Therefore, the correct answer is A.

As Approached Through the Quantity Theory of Money,aggregate Demand Is