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

question 13

Multiple Choice

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) :

• A) VM = GDP/MS
• B) VM = MS/GDP
• C) VM = MS x GDP
• D) all of the above

---

Definitions:

Merged Firm

Refers to a company formed when two or more firms voluntarily combine their operations, often to achieve synergies and improve competitive standing.

Shares Outstanding

The total number of shares of a corporation's stock that are currently owned by all its shareholders, including shares held by institutional investors and restricted shares.

Market Price

The current price at which an asset or service can be bought or sold in a public marketplace.