MV = PQ is money supply × money circulation speed = price level × commodity trading volume. M is the nominal demand and supply of money, P is the price level, Q is the volume of goods traded by monetary media in a certain period, and V is the circulation speed of money in the same period.
Extended data:
Suppose m represents the amount of money in circulation, v represents the speed of money circulation, and MV is the total amount of money used to buy goods. Suppose the average price of various commodities traded in a year is P, P', P "……… and the trading volume is Q, Q', Q", …… So: MV = PQ+P' Q'+P "Q"+……? Namely: mv = σ pq.
If P is the weighted average of P and T is the sum of Q, then P represents the general price level and T represents the total transaction volume of social goods, then the above formula can be written as: MV=PT, with the total transaction value on the right and the total monetary value on the left.
Baidu Encyclopedia-Money Quantity Theory