Monetarism is a mode of analysis that uses the equation of exchange to organize and analyze economic data.

Question

Quizplus · Accepted Answer

Monetarism is based on the equation of exchange, which states that the money supply multiplied by the velocity of money is equal to the price level multiplied by the level of real output. This equation is used to analyze the relationship between the money supply and other macroeconomic variables, such as inflation and economic growth.

Monetarism Is a Mode of Analysis That Uses the Equation