The velocity of money is represented as

  • A \(\frac{\text{Money supply}}{\text{Real GDP}}\)
  • B \(\frac{\text{Real GDP}}{\text{Money supply}}\)
  • C \(\frac{\text{Nominal GDP}}{\text{Money supply}}\)
  • D \(\frac{\text{Real GDP}}{\text{Nominal GDP}}\)
jamb 2010economics

The correct answer is A. \(\frac{\text{Money supply}}{\text{Real GDP}}\)

The velocity of money is a measurement of the rate at which money is exchanged in an economy.  Velocity of money is simply calculated by dividing the money supply with the economy's GDP.

money supply

     GDP

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