Question

a. the quantity equation shows the link between the number of transactions that people make and how much money they hold. it can be written. the right side of the equation specifies the. since t represents the total number of transactions, and p represents the price of a typical transaction, p × t represents the number of dollars exchanged in a given time period. the left side of the equation tells us about the money used to make these transactions. since m represents the quantity of money in the economy, and v represents the transactions velocity of money—the number of times an average dollar changes hands per time period—the product m × v specifies the. b. because the number of transactions is difficult to measure, economists usually use a different version of the quantity equation, one where total output in the economy y replaces the number of transactions t. we write this identity as. since y represents real output, the product p × y specifies

Explanation:

a. The quantity - equation is $M\times V = P\times T$. The right - hand side $P\times T$ is the total dollar value of transactions. The left - hand side $M\times V$ is also the total dollar value of transactions.
b. The alternative quantity equation is $M\times V=P\times Y$. Since $Y$ is real output, $P\times Y$ is nominal output.

Answer:

a. $M\times V = P\times T$; total dollar value of transactions; total dollar value of transactions
b. $M\times V = P\times Y$; nominal output