In the quantity theory of money, the equation MV = PT was given by:
A. Irving Fisher
B. Milton Friedman
C. John Maynard Keynes
D. Alfred Marshall
Answer: Option A
Solution (By JKSSB Mock Tests)
Irving Fisher formulated the equation of exchange MV = PT, where M is money supply, V is velocity of money, P is price level and T is volume of transactions.
Explanation:
The money multiplier is the ratio of the stock of broad money (such as M3) to the stock of reserve money, reflecting the extent of credit creation by the banking system.
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