According to the equation of exchange, nominal GDP equals

Question

Quizplus · Accepted Answer

The equation of exchange, often represented as MV = PQ, states that the amount of actual money balances (M) times the income velocity of money (V) equals nominal GDP (PQ), where P represents the price level and Q represents the quantity of goods and services produced in the economy. Therefore, option A correctly describes the relationship between nominal GDP and the components of the equation of exchange.

According to the Equation of Exchange, Nominal GDP Equals