The velocity of money is the ratio of ________ to ________.
A) real GDP; the money demand
B) nominal GDP; the stock of money
C) the money supply; the asset demand for money
D) consumption; investment

Question

Quizplus · Accepted Answer

The velocity of money is the ratio of nominal GDP to the stock of money. This is because velocity measures how quickly money is circulating through the economy, and this is ultimately determined by the amount of goods and services being produced (measured by GDP) and the amount of money available to facilitate those transactions (measured by the stock of money).

The Velocity of Money Is the Ratio of ________ to ________

The Velocity of Money Is the Ratio of to