The quantity theory of money states that
A) P x Q = M x V
B) P x M = Q x V
C) P x V = Q x M
D) P x V = P x V
E) V = 5

Question

Quizplus · Accepted Answer

The quantity theory of money is expressed as MV = PQ, where M represents the money supply, V represents the velocity of money, P represents the price level, and Q represents the quantity of goods and services produced. This equation can be rearranged to P x Q = M x V, making option A the correct choice.

The Quantity Theory of Money States That