It is assumed in the equation of exchange that the velocity of money is fixed or constant.

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Is this a safe assumption when applied to your own spending habits over the course of a month or a year? What would erratic and unpredictable velocity do to the usefulness of the equation of exchange?

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Economics Theory And Practice

ISBN: 9781118949733

11th Edition

Authors: Patrick J. Welch, Gerry F. Welch

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Question Posted: Feb 07, 2024 11:01 PM

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It is assumed in the equation of exchange that the velocity of money is fixed or constant.

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For most individuals spending patterns will vary over the course o...View the full answer

Economics Theory And Practice

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