The velocity of money can be calculated from the quantity equation with: A) P_tY_t. B) P_tY_tM_t. C) M_t/P_tY_t. D) P_tY_t/M_t. E) M_t.

Name: The velocity of money can be calculated from the quantity equation with: A) P t Y t . B) P t Y t M t . C) M t /P t Y t . D) P t Y t /M t . E) M t .
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Question

Quizplus · Accepted Answer

The velocity of money (V) is calculated using the quantity equation: MV = PY, where M is the money supply, P is the price level, and Y is the real output. Solving for V gives V = PY/M.

The Velocity of Money Can Be Calculated from the Quantity