The faster the rate of circulation of the money supply, the greater the output of goods and services in an economy.

Question

Quizplus · Accepted Answer

When the rate of circulation of money increases, it leads to greater economic activity, as people spend and invest more, leading to an increase in output of goods and services. This concept is known as the Quantity Theory of Money. However, other factors such as technological advancements, natural resources, and government policies also play a significant role in the output of goods and services.

The Faster the Rate of Circulation of the Money Supply