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UI Post-UTME Economics 2024 (Model questions) Question 5

Question 5

Money and Inflation

In the equation MV = PY, V represents

  1. A.Value of money
  2. B.Velocity of circulation of money
  3. C.Variation of national income
  4. D.All of the above
Show the answer and explanation

Answer: B (Velocity of circulation of money)

Explanation

In the quantity theory MV = PY, V is the velocity of circulation: how many times each unit of money is spent in a period.