The velocity of money is:
A) the average number of times a dollar is spent on final goods and services in a year.
B) a price that has been corrected for inflation.
C) when people mistake changes in nominal prices for changes in real prices.
D) an increase in the average level of prices.

Question

Quizplus · Accepted Answer

The velocity of money refers to the number of times a dollar is spent on final goods and services in a year. It is calculated by dividing nominal GDP by the money supply.

The Velocity of Money Is