What does velocity measure?
A) the average length of time that people hold wealth
B) how quickly aggregate spending will increase for a given decline in money demand
C) how quickly inflation will rise for a given increase in the money supply
D) how quickly money changes hands

Question

What does velocity measure?  
A) the average length of time that people hold wealth 
B) how quickly aggregate spending will increase for a given decline in money demand 
C) how quickly inflation will rise for a given increase in the money supply 
D) how quickly money changes hands

Quizplus · Accepted Answer

Velocity measures how quickly money changes hands in a given period of time, reflecting the speed at which transactions are occurring in the economy.

What Does Velocity Measure