DEFINITION
Fisher's Equation

"Fisher's equation": Economics. A formal expression of the quantity theory of money defining the relationship between the quantity of money in the economy, its velocity of circulation, the number of transactions over a given period and the general level of prices. The equation is conventionally expressed as: P = MV/TWhere: P = the general level of pricesM = the quantity of money in the economyV = its velocity of circulation, andT = the volume of transactions in a given period.
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