For the equation to explain short-run price behaviour, it is necessary that
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4 marks, −1MacroeconomicsDemand for money and monetary theoriesThe quantity theory of money and velocityModerateabout 1 min
CUET-PG 2020 Question 43: Demand for money and monetary theories
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For the equation PT = MV to explain short-run price behaviour, it is necessary that (A) P varies inversely with M (B) T remains unchanged (C) Short-run change in V be predicted (D) There is no change in the interest rate
Demand for money and monetary theories has come up 82 times in 7 exams since 2005.
What this question tests
This question is on The quantity theory of money and velocity, part of Demand for money and monetary theories in Macroeconomics.
The link between the money stock, prices and output through velocity.
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