The velocity of circulation is
A) the rate of change of the GDP deflator.
B) the average number of times a dollar of money is used in a year to buy goods and services in GDP.
C) the changes in the purchasing power of money over a given time period.
D) constant.

Question

Quizplus · Accepted Answer

The velocity of circulation refers to how quickly money moves through the economy, specifically, it is the average number of times a unit of currency (e.g., a dollar) is used to purchase goods and services included in GDP within a certain period of time.

The Velocity of Circulation Is