Velocity of Money Calculator
Velocity of Money Calculator
Component |
Description |
Gross Domestic Product (GDP) |
The total value of goods and services produced within a country in a specific period. |
Money Supply |
The total amount of money available in the economy, including currency and demand deposits. |
Velocity of Money |
The rate at which money circulates in the economy, or how often money is used to purchase goods and services within a certain period. |
Formula |
Velocity of Money = GDP / Money Supply |
Purpose |
Used to assess the efficiency of the money supply in the economy and its relationship with economic activity. |