Which of the following correctly gives us the equation of exchange?
A) TR = PQ.
B) MV = VM.
C) MV = PQ.
D) TR = VM.

Question

Quizplus · Accepted Answer

The equation of exchange is MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is the real output. This equation states that the total spending in an economy (MV) must be equal to the total value of goods and services produced (PQ).

Which of the Following Correctly Gives Us the Equation of Exchange