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The Velocity of Money Measures the Rate of Circulation of the Money

question 13

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The velocity of money measures the rate of circulation of the money supply and can be expressed by the following equation (note: GDP = gross domestic product and MS = money supply) :


Definitions:

Physiological State

The condition of normal function of a living organism's body and its systems.

Motivational Arousal

The process of being mentally stimulated to do or feel something, especially to do something creative or achieve goals.

A Need

A requirement essential for an organism's survival, such as food, water, shelter, or warmth.

Drive-Reduction Theory

A theory of motivation suggesting that behavior is driven by the desire to reduce internal tension caused by unmet biological needs.

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