The velocity of money is
A)the rate at which the Fed puts money into the economy.
B)the same thing as the long-term growth rate of the money supply.
C)the money supply divided by nominal GDP.
D)the average number of times per year a dollar is spent.

Question

Quizplus · Accepted Answer

The velocity of money refers to how fast money moves through the economy, or the average number of times a unit of currency is used to purchase goods and services within a specific time period. It does not directly relate to the actions of the Federal Reserve, the growth rate of the money supply, or a simple division of the money supply by nominal GDP.

The Velocity of Money Is