The velocity of money is:
A) the speed at which people save money.
B) the speed at which prices rise and cause a need for more money.
C) the average number of times that a unit of money is spent on final goods and services in a year.
D) the speed at which the central bank increases the money supply during a year.

Question

Quizplus · Accepted Answer

The velocity of money refers to how fast money moves through the economy, specifically, how often a unit of currency is used to purchase domestically-produced goods and services within a certain period. It is a measure of the economic activity related to spending, not saving, inflation, or central bank policies directly.

The Velocity of Money Is