If M stands for the money supply, V for the velocity of money, P for the average selling price, and Q for the output of goods and services, the equation of exchange is MV = PQ.

Question

Quizplus · Accepted Answer

The equation of exchange, MV = PQ, is correct and represents the relationship between the money supply, velocity of money, average selling price, and output of goods and services.

If M Stands for the Money Supply, V for the Velocity