Fisher's equation

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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.


See also