The velocity of money is
A) a measure of the speed at which money changes hands in transactions involving final goods and services.
B) the sum of currency outside banks and balances held in chequing accounts.
C) cash or similar assets held by commercial banks for the purpose of meeting depositor withdrawals and payments.
D) bank reserves divided by deposits.
E) the transfer of government deposits by the central bank between the government's account at the central bank and the government's accounts at commercial banks.

Question

Quizplus · Accepted Answer

The velocity of money is defined as the rate at which money circulates or changes hands within an economy. It measures how quickly money is spent on final goods and services, indicating the number of times a unit of currency is used in transactions over a given period.

The Velocity of Money Is