Money theory

Quick question about money theory. The equation: MV = PY, M = money supply, V - velocity, P - price, Y - output Would it be correct to say that PY = nominal GDP? Is Y equal to real GDP and price to the GDP deflator?

That looks correct. Thats why, generally, if you increase the money supply, while velocity and output are constant, all you’re doing is creating inflation (or increasing P).