• Knock_Knock_Lemmy_In@lemmy.world
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    3 days ago

    Your definition is pretty close to theory.

    V_{T} M = P T

    V_{T} is the velocity of money for all transactions in a given time frame;

    P is the price level;

    T is the amount of transactions occurring in a given time frame;

    M is the total nominal amount of money in circulation on average in the economy