Question

The quantity of money supply is determined by
A) demand & supply of money
B) Capital Market
C) money market
D) monetary authority

Answer 1

The law, that the quantity of the circulating medium is determined by the sum of the prices of the commodities circulating, and the average velocity of currency may also be stated as follows: given the sum of the values of commodities, and the average rapidity of their metamorphoses, the quantity of precious metal ...

Answer 2

Answer:

The quantity of money supply is determined by (A) demand & supply of money.

Explanation:

• The Quantity of the money supply is defined as the quantity theory of money in which the supply of the money and level of the price in the economy will become directly proportional to one another.
• The quantity of the money is the supply of the money that has a total amount of available which is already ready for funds. It includes cash, bank account balances which is used for circulating under economy.

• Formula for quantity of the money:

M*V = P*T

Here,

M is the money supply

V is the velocity of the money

P is the general price of the money

T is called as all transactions to be made.

The demand of money is defined as the money which is seen to be served for the purpose of the medium of the Exchange and store of the value.

• There are different braches for the demand of the money. They are:

1) The classical approach

2) Keynesian Approach

The supply of money is defined as the money when the total amount of the money is in circulation within or under existence in the country.

Therefore, The quantity of money supply is determined by demand & supply of money.

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