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Which statement is FALSE?
A) MV = GDP
B) PQ = GDP
C) MV = PQ
D) None is false.
MV = GDP
An equation representing the relationship between the money supply (MV) and gross domestic product (GDP), highlighting the velocity of money in economic activities.
PQ = GDP
An equation stating that the price level (P) times the quantity of output (Q) is equal to the Gross Domestic Product.
Equation of Exchange
A formula representing the relationship between the money supply, its velocity, the price level, and the volume of transactions in an economy.
- Master the concepts of the equation of exchange and its components (MV=PQ).
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Learning Objectives
- Master the concepts of the equation of exchange and its components (MV=PQ).
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