Multiple choice

Who has given the equation? P = kR/M {C + R (1 - C)} (Symbols have usual meanings)

  1. Pigou

  2. Keynes

  3. Fischer

  4. Robertson
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A Correct answer
Explanation

This is Pigou's equation of exchange from his quantity theory approach. Pigou extended the Cambridge cash-balance version of the quantity theory, where P represents price level, and the equation shows the relationship between money supply, prices, and cash balances.

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