According to the quantity theory of money,the velocity of money equals the amount of money people spend divided by the product of the price level and the quantity of goods and services they purchase.

Question

Quizplus · Accepted Answer

The velocity of money is calculated as the ratio of nominal GDP (the product of the price level and the quantity of goods and services) to the money supply, not the amount of money people spend.

According to the Quantity Theory of Money,the Velocity of Money