According to the equation of exchange, the velocity of money is equal to
A)M/PY.
B)PY/M.
C)PM/Y.
D)MY/P.

Name: According to the equation of exchange, the velocity of money is equal to A)M/PY. B)PY/M. C)PM/Y. D)MY/P.
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Question

Quizplus · Accepted Answer

The equation of exchange is represented as MV = PY, where M is the money supply, V is the velocity of money, P is the price level, and Y is the real output. Rearranging the equation to solve for V gives V = PY/M, making option B correct.

According to the Equation of Exchange, the Velocity of Money