The product of ____________________ and _________________ is equal to the total amount of spending in an economy.
A) the money supply; the price level
B) velocity; the price level
C) the money supply; velocity
D) velocity; the level of output

Question

Quizplus · Accepted Answer

The equation that represents this relationship is known as the Quantity Theory of Money, which states that the total amount of spending in an economy (measured by nominal GDP) is equal to the product of the money supply and the velocity of money. Therefore, choice C, which includes both the money supply and velocity, is the correct answer. The other choices are not incorrect, as they are also important variables in understanding the economy, but they do not directly relate to the total amount of spending.

The Product of ____________________ and _________________ Is Equal to the Total

The Product of ____ and _ Is Equal to the Total