The equation of exchange is a fundamental concept in economics, representing the relationship between the money supply, the velocity of money, the price level, and the volume of transactions. The standard equation of exchange is MV = PT, where: * M = Money supply * V = Velocity of money (the rate at which money changes hands) * P = Price level * T = Volume of transactions From the equation MV = PT, we can derive an expression for the price level (P). Dividing both sides of the equation by T, we get: P = MV/T Therefore, the second equation of exchange is P = MV/T