In words, the equation of exchange says that

Question

Quizplus · Accepted Answer

The equation of exchange, often represented as MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is the quantity of goods and services produced, essentially states that the total amount of money spent in an economy (on the left side of the equation) equals the total amount received by producers (on the right side of the equation). This is reflected in choice A, which correctly summarizes the concept by stating that the total amount spent on final output equals the amount received for final output.

In Words, the Equation of Exchange Says That