Which of the Following Correctly Illustrates the Quantity Theory of Money

question 68

Multiple Choice

Which of the following correctly illustrates the quantity theory of money?

• A) velocity of money × price level = money supply × real GDP
• B) money supply × velocity of money = real GDP × price level
• C) (money supply - velocity of money) = (price level - real GDP)
• D) money supply/velocity of money = price level/real GDP

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Definitions:

Min Function

A mathematical function used to determine the smallest value among a set of numbers or inputs.

Income

A measure of money received on a regular basis, either through employment, business, investments, or other sources.

Price of X

The specific cost or value associated with a particular item or commodity, denoted as "X."

Price of Y

The monetary cost or value assigned to a good or service, labeled as 'Y'.