Lecture 7: Quantity Theory of Money and Aggregate Demand

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Economics

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4 Terms

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Define Velocity of money
Velocity means the number of times each unit of the currency is used to make transactions
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What is the formula for velocity of money?
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What is the Equation of Exchange?
The equation of exchange is an accounting identity because we’ve defined V such that the equation holds

(rearranging the velocity of money equation)
The equation of exchange is an accounting identity because we’ve defined V such that the equation holds (rearranging the velocity of money equation)
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