In the equation MV+ MI VI = PT, 'M 'denotes:
A)velocity of money
B)money in circulation
C)bank deposit
D)none of these

Question

Quizplus · Accepted Answer

In the equation MV + M1V1 = PT, 'M' denotes the money in circulation. This equation is a representation of the Fisher Equation of Exchange, where M is the money supply, V is the velocity of money, M1 is the money supply from other sources like bank deposits, V1 is their velocity, P is the price level, and T is the volume of transactions in the economy.

In the Equation MV+ MI VI = PT, 'M 'Denotes