Institutionally-focused economists argue:
A)the equation of exchange is incorrect.
B)the equation of exchange should be read from right to left.
C)the equation of exchange should be read from left to right.
D)both the quantity theory and the equation of exchange are incorrect.

Question

Quizplus · Accepted Answer

Institutionally-focused economists argue that the equation of exchange should be read from right to left, emphasizing the role of expenditures and output in determining the money supply and velocity, rather than the other way around. This perspective focuses on the demand side of the economy and the institutional factors that influence it.

Institutionally-Focused Economists Argue