Velocity represents the average number of times that a dollar is used in purchasing final goods and services in a one-year period.

Question

Quizplus · Accepted Answer

Velocity of money is defined as the number of times a unit of currency is spent in a given time period. It represents the rate at which money is exchanged in an economy. It is calculated as the ratio of nominal Gross Domestic Product (GDP) to the money supply.

Velocity Represents the Average Number of Times That a Dollar