Final answer:
The correct expression for the velocity of money is Velocity (V) = Nominal GDP / Money Supply, which is a key indicator in economics that describes the rate at which money circulates through the economy.
Step-by-step explanation:
Velocity of money is an economic term used to quantify the rate at which money is exchanged in an economy. It's a key component in understanding how an economy functions. To find the velocity of money, you use the following formula: Velocity (V) = Nominal GDP (the total value of all goods and services produced in an economy without considering inflation) divided by the money supply (the total amount of money circulating in an economy, often referred to as M1 when including cash and checkable deposits). Therefore, the correct expression for the velocity of money is:
V = Nominal GDP / Money Supply
This equation is also known as the basic quantity equation of money. The identity is based on the relationship that the product of the money supply and velocity equals the product of the price level and real GDP, which is the same as the nominal GDP.