MV=PQ
such that
M = money supply
V = velocity (number of times average dollar is spent)
P = price level
Q = physical volume of all goods and serves produced
MV = total amount of money spent on purchases
PQ = total amount received by sellers of output
M = money supply
V = velocity (number of times average dollar is spent)
RAZD writes:
The economy is the movement of value between people. Having 3 billion millionaires that don't spend money is not an economy, 1 person spending a buck to buy something from someone else is.
This is why the "trickle-down" theory is false, and why it resulted in the failure of the economy ... from the bottom up.
Enjoy.
Yes indeed Monetarism, which Greenspan rejected and Volker proved to be right as the destroyer of stagflation.
The problem with the economy is as simple as V, and as complex as human behavior. The destruction of the economy is as simple as placing all wealth in the super rich, who do little or nothing to help the 'V' in the equation.
Of course the dumbasses in Congress (primarily Republican) are incapable of understanding this equation just as they do not understand investments in science, technology, and education are the primary way to increase productivity, the only way to grow an economy other than population growth {abe} in the US {/ABE}(as in immigrants, legal or not).
{ABE} I eagerly await any purported disproofs of my 'simplistic' understanding of economics, be it here or any other venue.
Edited by anglagard, : clarity
Edited by anglagard, : format
Edited by anglagard, : challenge
Edited by anglagard, : spelllin'
Read not to contradict and confute, not to believe and take for granted, not to find talk and discourse, but to weigh and consider - Francis Bacon
The more we understand particular things, the more we understand God - Spinoza