The quantity equation for money, by itself:
A)may be thought of as a definition for velocity.
B)implies that the velocity of money is constant.

Question

Quizplus · Accepted Answer

The quantity equation for money, MV = PY, defines velocity (V) as the ratio of nominal GDP (PY) to the money supply (M), thus it can be thought of as a definition for velocity. It does not imply that velocity is constant.

The Quantity Equation for Money, by Itself