Income velocity of money
From Wikipedia, the free encyclopedia
In economics, income velocity of money is the number of times an individual unit of currency turns over (i.e., is spent) in a specific period of time. Velocity affects the amount of economic activity generated by a given money supply.
The velocity of the money supply is Gross Domestic Product/money (be it M0, M1, M2, or M3; see money supply for details).
A rise or fall in the velocity of money usually follows a rise or fall in the interest rate.
[edit] See also
- Quantity theory of money (includes velocity of money)
