Quantity theory of money (often abbreviated QTM) is one of the directions of Western economic thought that emerged in the 16th-17th centuries. The QTM states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply. This calculator calculates the stock of money using velocity, price level, income values.
Formula:
M = Pā¢(Y÷V)
where, M = stock of money, V = velocity (how many times a unit of money turns over during a period of time), P = price level, Y = real income