Question

The velocity of money is a. the money supply divided by nominal gdp. b. the same thing as the long-term growth rate of the money supply. c. the average number of times per year a dollar is spent. d. the rate at which the fed puts money into the economy.

Answer 1

The velocity of money is not the money supply divided by nominal gdp, nor the long-term growth rate of the money supply. It is not the rate at which the fed puts money in the economy but it is the average number of times per year a unit of money (dollar) is spent.