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Username: Maria Rating:  Asked to: Chaoxiang Lee Date Created: 28 Feb 2017 |
| Category | 46 |
| Tag | Financial |
| Question | What is the 'Velocity Of Money'? |
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Hello Maria, The velocity of money is the rate at which money is exchanged from one transaction to another and how much a unit of currency is used in a given period of time. Velocity of money is usually measured as a ratio of GNP to a country's total supply of money. Velocity is important for measuring the rate at which money in circulation is used for purchasing goods and services, as this helps investors gauge how robust the economy is, and is a key input in the determination of an economy's inflation calculation. |
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