Question

The velocity of money can best be described as A. the growth rate of the money supply. B. how quickly prices are increasing. C. the number of times each dollar in the money supply us used to buy goods and services included in GDP. D. how quickly output is increasing.

Answer 1

Answer:

The correct answer is option C.

Explanation:

The velocity of money can be defined as the number of times money changes hands. In other words, it represents the number of times, a unit of money is used to purchase goods and services.  

It shows the number of times the households and businesses spend money. It indicates how much a unit of currency has been used in a given period of time.