Asked by Victoria Nguyen on Jul 25, 2024
Verified
The velocity of money is
A) the rate at which the Fed puts money into the economy.
B) the same thing as the long-term growth rate of the money supply.
C) the money supply divided by nominal GDP.
D) the average number of times per year a dollar is spent.
Velocity of Money
The rate at which money is exchanged in an economy, reflecting the number of times a unit of currency circulates within a specific time period.
Nominal GDP
The market value of all final goods and services produced within a country in a given period, measured in current prices.
- Analyze the pace at which money exchanges hands based on the existing supply of money, the requirement for monetary assets, and the nation's total economic production.
Verified Answer
ME
Madison ElmoreJul 30, 2024
Final Answer :
D
Explanation :
The velocity of money refers to how fast money moves through the economy, or the average number of times a unit of currency is used to purchase goods and services within a specific time period. It does not directly relate to the actions of the Federal Reserve, the growth rate of the money supply, or a simple division of the money supply by nominal GDP.
Learning Objectives
- Analyze the pace at which money exchanges hands based on the existing supply of money, the requirement for monetary assets, and the nation's total economic production.