The Equation of Exchange

question 61

Multiple Choice

The equation of exchange

• A)states that the price level times velocity equals GDP divided by the interest rate
• B)states that total spending equals real GDP
• C)states that money supply times velocity equals real GDP
• D)is an identity,not a theory
• E)becomes the quantity theory of money on the assumption that the price level is always constant

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Definitions:

Arbitration

A form of dispute resolution where an impartial third party makes a binding decision to resolve a conflict.

Arbitrator

A neutral third party who is appointed to resolve a dispute between two or more parties by making a decision after considering all the relevant facts and arguments.

Negotiations

The process in which two or more parties with differing needs and goals discuss an issue to find a mutually acceptable agreement.

Alternative Dispute Resolution

A range of processes and techniques outside of the judicial system that are used to resolve conflicts or disputes between parties, including mediation and arbitration.