The velocity of money is defined as
A)the time it takes the average worker to get to the bank with his/her paycheck
B)the time it takes banks to clear checks
C)the average number of times per year each dollar is used to purchase final goods and services
D)M × P ÷ Y
E)the average number of times per year each dollar is spent for goods, payrolls, Social Security payments, etc.

Question

Quizplus · Accepted Answer

The velocity of money is defined as the average number of times per year each dollar is used to purchase final goods and services. It is calculated by dividing nominal GDP by the money supply.

The Velocity of Money Is Defined as