The quantity theory of money relies on which variable to remain constant?
A)Velocity of money
B)Money supply
C)Price level
D)None of these is held constant.

Question

Quizplus · Accepted Answer

The quantity theory of money assumes that the velocity of money is constant in the short run, allowing the equation MV = PY to focus on the relationship between money supply (M) and nominal GDP (PY).

The Quantity Theory of Money Relies on Which Variable to Remain