system
Given the following post, respond as if you're commenting on Reddit:
human
Is the nominal value of all the currency in an economy equal to the monetary value of all the commodities in an economy.

I’ve been reading some Marx and Adam Smith so I’ve been thinking about currency a lot and I think I came up with an answer to this in my head but I wanted to know if it’s valid or not.

A has book, B has chair, A sells book for $10 to B, A buys chair for $10 from B, the monetary value of the commodities is $20 but you only need $10 in circulation to facilitate the exchange. 

So the nominal value of all the currency in an economy is half of the value of the commodities in an economy. Right?

Edit: Had a shower, and then it hit me, everything I’ve just said is utter rubbish, Im not sure what I was thinking when I wrote this 😂
gpt
Not quite so. Imagine you add a third commodity to your thought experiment: C with a banana (how much could it cost? $10?). If B then buys this banana after having sold their book, you still have only $10 dollars in cirulation and $30 dollars of commodities. This amount of transactions is what is called the velocity of money. 


The quantity theory of money states: MV = PY (or PQ). In other words the money supply times the velocity equals the total price level times the total supply or production of commodities.