The Velocity of Money Is Defined as

question 194

Multiple Choice

The velocity of money is defined as

• A)the average number of times each dollar is used to purchase goods and services.
• B) .
• C)the total number of times each dollar is used to purchase goods and services.
• D)P × Y.
• E)the speed with banks can clear transactions.

---

Definitions:

Real Exchange Rate

The speed at which an individual is able to convert the money of one nation into that of another, taking inflation into account.

Nominal Exchange Rate

The speed at which the currency of one nation can be traded for the currency of another nation, without correction for inflation.

Trade Balance

Trade balance is the difference between the value of a country's exports and imports over a certain period, indicating the relative strength of its international trade.

Investment

The allocation of resources, often financial, into endeavors with the expectation of generating future returns.