The velocity of money is:
A)the purchasing power of money.
B)the value of a dollar in relation to foreign currency.
C)the average number of times each dollar is spent on final goods and services in a given year.
D)the average length of time it takes for a dollar of income to be spent.
E)the total amount of money that is in circulation for consumption spending.

Question

Quizplus · Accepted Answer

The velocity of money refers to the average number of times each dollar is spent on final goods and services in a given year. The other options are not related to the velocity of money - A is the purchasing power of money, B is the exchange rate between currencies, D is the income velocity of money, and E is the money supply.

The Velocity of Money Is