Fisher’s quantity theory is explained by his famous equation given as ________.

Correct option is B

The correct answer is (b) MV = PT
· The correct equation for Fisher's quantity theory of money is: MV = PT
· The equation states that the value of money (MV) multiplied by the velocity (V) equals the price level (P) multiplied by the volume of transactions (T). This means that the total amount of money spent in an economy (MV) determines the average price level (P) of goods and services sold (T)
· Although MV = PT is the most common form of Fisher's equation, other versions exist. One of them is: P = MV/T
· This equation expresses the price level (P) as a direct function of the money supply (M), its velocity (V), and the volume of transactions (T)
· Fisher's quantity theory of money has been a crucial concept in monetary economics for decades. It helps understand how changes in the money supply affect inflation and economic activity