In the equation of exchange, the term P × Q is the same as
A) real GDP.
B) nominal GDP.
C) the money supply.
D) national income.

Question

Quizplus · Accepted Answer

The term P × Q in the equation of exchange represents the monetary value of all goods and services produced in an economy, which is nominal GDP. Therefore, the correct answer is B). A represents the real GDP, which is adjusted for inflation while C and D are incorrect because they do not represent the value of goods and services produced in an economy.

In the Equation of Exchange, the Term P × Q