It dictates, for example, that the inflation rate grows as the money supply, all else equal.
This is the fundamental equation of the quantity theory. It states that the product of the amount of money in an economy and the velocity of money is equal to the mean price level times the purchase frequency, or MV = PQ. It dictates, for example, that the inflation rate grows as the money supply, all else equal.
This is the fundamental equation of the quantity theory. It states that the product of the amount of money in an economy and the velocity of money is equal to the mean price level times the purchase frequency, or MV = PQ.
equation of {exchange}