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Answer to Question #109821 in Macroeconomics for Sarai
Question #109821
What is the Equation of Exchange presented in the form of an Identity? ___________________________________________________ _____________ where: M represents Money Supply; V represents Velocity; ≡ means must be equivalent to; P represents Price; and Q represents Real G DP.
Expert's answer
"M \u00d7 V = P \u00d7 Q"
where: M represents Money Supply; V represents Velocity; ≡ means must be equivalent to; P represents Price; and Q represents Real G DP.
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Dear visitor, please use panel for submitting new questions
In a large economy such as ours, it is impossible to simply count how many times each dollar changes hands (velocity). H ow do we calculate V?
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