The equation of exchange states that
A)money in circulation $\times$ prices = velocity $\times$ income
B)money in circulation $\times$ income = velocity $\times$ prices
C)real GDP = money in circulation $\times$ velocity
D)nominal GDP = money in circulation $\times$ velocity
E)real GDP = prices $\times$ money in circulation $\times$ velocity

Question

Quizplus · Accepted Answer

The equation of exchange is MV = PQ, where M is money supply, V is velocity of money, P is price level, and Q is real GDP. Nominal GDP is represented by PQ, which equals MV.

The Equation of Exchange States That A)money in Circulation ×\times× Prices = Velocity

The Equation of Exchange States That
A)money in Circulation $\times$ Prices = Velocity