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 C K M # Amount $ 2017-2024

Montana Driver 2017-2024 Form

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♪ [music] ♪ [Narrator] Today we're going to introduce an important tool for thinking about issues in macroeconomics -- the quantity theory of money. Let's imagine the journey a dollar bill might take in a year. Imagine that the dollar bill starts with Tyler, who buys a pupusa from Don, the street vendor. Don gives it to his daughter, who spends it on a pony ride at the fair. It ends up in the hands of Alex, who, after losing it and then finding it in his couch cushions, buys a cup of coffee while on a road trip to see his favorite polka band. So in a year, this dollar has been spent three times -- on the pupusa, the pony ride, and on a cup of coffee. Okay, we've got the building blocks to understand the quantity theory of money already. Our dollar bill -- well, that's money, which we represent with the letter "M" -- how many times that dollar gets used in a year is called the “velocity of money,” which we'll label with a "V." In this case, V is 3, as our bill was spent three

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