Macroeconomics

q theory of investment:

The theory according to

which expenditure on capital goods depends on the

ratio of the market value of installed capital to its re-

placement cost.

Quantity equation:

The identity stating that the

product of the money supply and the velocity of

money equals nominal expenditure (MV

 PY );

coupled with the assumption of stable velocity, an

explanation of nominal expenditure called the quan-

tity theory of money.

Quantity theory of money:

The doctrine em-

phasizing that changes in the quantity of money lead

to changes in nominal expenditure.

Quota:

See import quota.

Random variable:

A variable whose value is de-

termined by chance.

Random walk:

The path followed by a variable

whose changes over time are unpredictable.