The Equation of Exchange

question 396

Multiple Choice

The equation of exchange

• A) cannot be used in an economy with inflation.
• B) is MV = PY.
• C) becomes the quantity theory if velocity and the price level are constant.
• D) All of the above answers are correct.

---

Definitions:

Short-Term Disability Leave

A period of absence from work granted to employees who are temporarily unable to perform their jobs due to a medical condition.

Purchasing Group

A consortium of buyers who pool their resources to buy goods or services collectively, typically to obtain lower prices.

Medical Practices

The professional activities and standards related to the prevention, diagnosis, and treatment of diseases, managed by health professionals.

Balance Theory

According to Heider, people prefer attitudes that are consistent with each other over those that are inconsistent. A person (P) tries to maintain consistency in attitudes to, and relationships with, other people (O) and elements of the environment (X).