The Equation of Exchange Always Holds Because

question 23

Multiple Choice

The equation of exchange always holds because

• A) the quantity of money is determined by the amount of spending on goods and services.
• B) the quantity of money dictates the size of nominal GDP, since money is a social usage.
• C) the number of times money is spent to obtain goods and services measures total spending on GDP.
• D) MV measures total spending on GDP and PY also measures of total spending on GDP.

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Definitions:

Values

Core beliefs or principles that guide an individual's or society's behaviors, decisions, and actions.

Transaction

Any agreement or exchange between two parties where goods, services, or money are passed from one to the other.

Pay Phone

A public telephone that operates with the insertion of coins or by credit card payment.

Economic Theory

A collection of theories and frameworks that describe the workings of economies and the interactions between economic participants.