Fisher's equation: Difference between revisions
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''Economics.'' | ''Economics.'' | ||
A formal expression of the quantity theory of money defining the relationship between the quantity of money in the economy, its velocity of circulation, the number of transactions over a given period and the general level of prices. | A formal expression of the quantity theory of money defining the relationship between the quantity of money in the economy, its velocity of circulation, the number of transactions over a given period and the general level of prices. | ||
The equation is conventionally expressed as: P = MV/T | The equation is conventionally expressed as: | ||
P = MV / T | |||
Where: | Where: | ||
P = the general level of prices | |||
M = the quantity of money in the economy | :P = the general level of prices, | ||
V = its velocity of circulation, | |||
T = the volume of transactions in a given period. | :M = the quantity of money in the economy, | ||
:V = its velocity of circulation, | |||
:T = the volume of transactions in a given period. | |||
== See also == | == See also == | ||
* [[Quantity theory of money]] | * [[Quantity theory of money]] | ||
[[Category:The_business_context]] | |||
Latest revision as of 14:44, 1 July 2022
Economics.
A formal expression of the quantity theory of money defining the relationship between the quantity of money in the economy, its velocity of circulation, the number of transactions over a given period and the general level of prices.
The equation is conventionally expressed as:
P = MV / T
Where:
- P = the general level of prices,
- M = the quantity of money in the economy,
- V = its velocity of circulation,
- T = the volume of transactions in a given period.
