« previous next »

Author Question: What is the equation of exchange? What are the variables, which are in it, and how do they relate to ... (Read 58 times)

geodog55

  • Hero Member
  • *****
  • Posts: 530
on: Jun 30, 2018
What is the equation of exchange? What are the variables, which are in it, and how do they relate to each other?

Question 2

Societies in which _____ produce more entrepreneurs.
 a. the ratio of immigrants to the local population is high
  b. culture supports individual achievements
  c. individuals are self-interested
  d. immigrants are allowed to hold government positions
  e. immigrants are more intelligent than the local population


Missbam101

  • Sr. Member
  • ****
  • Posts: 341
Reply #1 on: Jun 30, 2018
Answer to Question 1

The equation of exchange can be written as M V = P Q where M = money supply, V = velocity (the speed at which money circulates in the economy), P = the price level of GDP, and Q = the level of real GDP. P Q, therefore, is nominal GDP.

As written, the equation is an accounting identity, and embodies no economic theory. When assumptions are made regarding how variables act or react, the equation of exchange can become the basis for economic theory.

Answer to Question 2

b


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The Food and Drug Administration has approved Risperdal, an adult antipsychotic drug, for the symptomatic treatment of irritability in children and adolescents with autism. The approval is the first for the use of a drug to treat behaviors associated with autism in children. These behaviors are included under the general heading of irritability and include aggression, deliberate self-injury, and temper tantrums.

Did you know?

Every 10 seconds, a person in the United States goes to the emergency room complaining of head pain. About 1.2 million visits are for acute migraine attacks.

Did you know?

Illicit drug use costs the United States approximately $181 billion every year.

Did you know?

Amoebae are the simplest type of protozoans, and are characterized by a feeding and dividing trophozoite stage that moves by temporary extensions called pseudopodia or false feet.

Did you know?

The eye muscles are the most active muscles in the whole body. The external muscles that move the eyes are the strongest muscles in the human body for the job they have to do. They are 100 times more powerful than they need to be.

Comparing allele and genotype frequencies in a population with the Hardy-Weinberg equation and a Pun Comparing allele and genotype frequencies in a population with the Hardy-Weinberg equation and a Pun
How to sketch a quadratic equation that is in standard form (Question 1) How to sketch a quadratic equation that is in standard form (Question 1)
How to sketch a quadratic equation using transformations after completing the square (Question 2) How to sketch a quadratic equation using transformations after completing the square (Question 2)
Soils support plant growth through ion exchange Soils support plant growth through ion exchange
Finding the equation of a line Finding the equation of a line
Write the acidic equilibrium equation for HC₆H₅O. Write the acidic equilibrium equation for HC₆H₅O.
Video: DNA close up Animation

For a complete list of videos, visit our video library