Question

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.

Answer 1

The correct answer is D

Step-by-step explanation:

Velocity of money is a tool for the measurement or evaluation of the rate at which the money is being exchanged in an economy or market. It is computed as the equation which divide the GDP (Gross Domestic Product) with the money supply . The velocity of the money is the number of times, the money moves or circulate from one entity to another entity.

So. it is the average number of times the dollar spent per year by the entities.