In the equation $\vec { M } + \vec { v } = \vec { P } + \vec { Y } _ { R }$ ,what does $\vec { v }$ stand for?
A) the velocity of money
B) growth in the velocity of money
C) the market value of goods and services
D) growth in the market value of goods and services

Question

Quizplus · Accepted Answer

In the given equation, $\vec{v}$ stands for growth in the velocity of money, which means how fast money is changing hands or circulating in the economy. The other variables in the equation represent the following:
- $\vec{M}$: monetary base
- $\vec{P}$: price level of goods and services
- $\vec{Y}_R$: real GDP (output)

In the Equation M⃗+v⃗=P⃗+Y⃗R\vec { M } + \vec { v } = \vec { P } + \vec { Y } _ { R }M+v=P+YR​

In the Equation $\vec { M } + \vec { v } = \vec { P } + \vec { Y } _ { R }$