With M_S = supply of money, V = velocity of money, P = price level, and Y = real output,Which one of the following indicates the quantity theory of money expression? A) M_SY = PV B) M_SP = VY C) M_S = PY - V D) M_SV = PY

Question

Quizplus · Accepted Answer

The quantity theory of money is expressed 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. This matches choice D, where M_S represents the money supply (M) and the equation aligns with the theory's formula.

With MS = Supply of Money, V = Velocity of Money

With M_S = Supply of Money, V = Velocity of Money