Velocity is the average number of times a dollar is spent to buy
A) final goods and services in a year.
B) final and intermediate goods and services in a year.
C) final goods,but not services,in a year.
D) services in a year.

Question

Quizplus · Accepted Answer

Velocity is a measure of how fast money circulates in an economy. It is calculated by dividing the nominal gross domestic product (GDP) by the money supply. Since GDP only includes final goods and services, and not intermediate goods, and since velocity is a measure of how frequently a dollar is spent, it follows that velocity is the average number of times a dollar is spent to buy final goods and services in a year.

Velocity Is the Average Number of Times a Dollar Is