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Economics (AS & A Level) · May / June 2025 · Paper 34 · Question 19

9708Money and banking

The quantity theory of money is sometimes represented by the equation MV = PT. Which statement is not correct?

  1. AM is a measure of the total value of notes and coins in circulation in the country.
  2. BP measures the average level of prices in the country.
  3. CT stands for the quantity of real transactions during the year.
  4. DV represents the number of times a unit of money is spent during a given time period.

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Correct answer: A. M is a measure of the total value of notes and coins in circulation in the country.

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