### Quantity Theory of Money: True or False

#### Abstract

I convert *F=ma* into *m=F*÷*a* arithmetically as economists convert *V=PY*÷*M* into *MV=PY*. *m=F*÷*a* predicts absurdly that there is no mass if acceleration is zero. For example, you do not have mass when you sleep. Similarly, *MV=PY* predicts ridiculously that there is no aggregate income if there is no money. In fact, barter economy operates. As force is scalar in *F=ma* calculated as mass multiply acceleration so that force is not cause to determine mass in* m=F*÷*a*, income velocity is scalar in *V=PY*÷*M* calculated as ex-post nominal aggregate income is divided by ex-post quantity of money stock so that aggregate income does not depend on income velocity. Since the symbol *V* in *V=PY*÷*M* is scalar and the symbol *V* in *MV=PY* is cause so that *MV=PY* is not equivalent to *V=PY*÷*M*, arithmetical conversion is an invalid method to prove *MV=PY*. In other words, it is computation that *MV=PY* is equivalent to *V=PY*÷*M* as exactly as *m=F*÷*a* is equivalent to *F=ma* while it is thinking that *MV=PY* and *V=PY*÷*M* are different. Hence, quantity theory of money is false.

#### Full Text:

PDFDOI: https://doi.org/10.5539/ijef.v9n10p46

Copyright (c) 2017 Chao Chiung Ting

License URL: http://creativecommons.org/licenses/by/4.0

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