According to the equation of exchange, if the money supply rises by £50 million and the velocity of circulation is constant and greater than 1, nominal national income will rise by

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The equation of exchange is MV = PQ, where M is the money supply, V is the velocity of circulation, P is the price level, and Q is the quantity of goods and services produced (real GDP). If the money supply rises and the velocity of circulation is constant and greater than 1, nominal national income (PQ) will rise by more than the increase in the money supply because the same unit of money is used in multiple transactions.

According to the Equation of Exchange, If the Money Supply