Which of the Following Is True of the Equation of Exchange

question 110

Multiple Choice

Which of the following is true of the equation of exchange?

• A)It states that the product of the price level and velocity of money is equal to real GDP.
• B)It states that aggregate demand in an economy is equal to total investment spending.
• C)It states that money supply times velocity of money equals real GDP.
• D)It states that velocity of money is equal to the ratio of nominal GDP and money supply.
• E)It changes to the quantity theory of money if the price level is assumed to be constant.

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