The velocity of money is
A) Highly unstable.
B) Impossible to measure.
C) The rate at which money loses its value.
D) The rate at which inflation rises.
E) The rate at which money changes hands.

Question

Quizplus · Accepted Answer

The velocity of money refers to the rate at which money changes hands within an economy. It is a measure of the frequency with which a unit of currency is used to purchase goods or services in a given period of time. It is not unstable and can be measured, making choices A and B incorrect. It is also not related to the rate at which money loses its value (C) or the rate of inflation (D).

The Velocity of Money Is