Fisher Equation Flashcards
1
Q
what does the fisher equation suggest
A
that there is a direct link between inflation and money supply
2
Q
what is the fisher equation
A
MV=PQ
3
Q
what does M stand for
A
money supply
4
Q
what does V stand for
A
velocity of circulation
5
Q
what does P stand for
A
the average price level of g/s
(inflation)
6
Q
what does Q stand for
A
the quality of goods and services sold
7
Q
A
only money supply can influence price level as Q and V are fixed
8
Q
who argues that velocity can influence inflation.
A
kenysians
they say that in case of a depression changes in the number of transaction does influence inflation
9
Q
A
