Asked by aimee parker on May 14, 2024
Verified
The velocity of circulation,V,is equal to
A) PQ.
B) MQ.
C) PQ/M.
D) M/PQ.
E) Q.
Velocity of Circulation
The rate at which money exchanges hands in the economy, influencing overall economic activity and inflation.
- Absorb the relationship dynamics among the supply of money, its circulation velocity, pricing levels, and economic output.
Verified Answer
MB
Mohamed Badr El NemrMay 18, 2024
Final Answer :
C
Explanation :
The velocity of circulation is defined as the total amount spent in a given period divided by the total quantity of money in circulation, i.e., V = PQ/M. Therefore, choice C, PQ/M is the correct option.
Learning Objectives
- Absorb the relationship dynamics among the supply of money, its circulation velocity, pricing levels, and economic output.