The basic equation of monetarism is
A) $M V = P Q$
B) $S _ { a } + T + M = I _ { g } + G + X _ { n }$
C) $V = M / \mathrm { PQ }$
D) $C _ { a } + I _ { g } + X _ { n } + G = \mathrm { GDP }$

Question

Quizplus · Accepted Answer

The basic equation of monetarism, also known as the quantity theory of money, is MV = PQ, where M is the money supply, V is the velocity of money (how quickly money is circulated), P is the price level, and Q is the level of economic output. This equation suggests that an increase in the money supply leads to a proportional increase in the price level or inflation, while a decrease in the money supply leads to deflation. Monetarists believe that managing the money supply is the key to achieving economic stability and controlling inflation.

The Basic Equation of Monetarism Is A) MV=PQM V = P QMV=PQ

The Basic Equation of Monetarism Is
A) $M V = P Q$