Question

The velocity of money measures:_________a) the speed with which coins and paper money are removed from circulation. b) the average number of times the average dollar is turned over in relation to GDP. c) the average number of times money is removed from circulation in a year. d) the ratio of coins and paper money to demand; deposits and other checkable deposits. e) the ratio of the money supply and rate of GDP in an annual period.

Answer 1

Answer:

b) the average number of times the average dollar is turned over in relation to GDP

Explanation:

The velocity of money refers to the measurement with respect to the rate where the money should be exchanged in an economy. It should be determined as the gross domestic product ratio to the M1 or M2 money supply

Also the average number should be multiplied with the average dollar that turned over with respect to the GDP

Therefore the option b is correct