The velocity of money is
A)the average number of times that a dollar is spent in buying the total amount of final goods and services.
B)the ratio of the money stock to high-powered money.
C)the ratio of the money stock to interest rates.
D)the average number of times a dollar is spent in buying financial assets.

Question

Quizplus · Accepted Answer

The velocity of money measures the frequency at which money is used to purchase goods and services in an economy. It is essentially the number of times a dollar bill changes hands in transactions for final goods and services over a specific period of time. The correct option is therefore A.

The Velocity of Money Is