Quantity Equation

The Quantity Equation is a fundamental concept in economics relating the total money supply (how much money exists), the price level (average prices of goods and services), the economy's output (goods and services produced), and how often money circulates. Mathematically, it shows that the total money in the economy multiplied by how many times it changes hands equals the overall value of goods and services produced. In simple terms, if there's more money or it moves faster, prices tend to rise; if production increases, prices may stay stable or fall, keeping the economy balanced.