velocity

velocity definition - business

velocity

The number of times money is spent during a specified period. A high velocity of money indicates consumers and businesses are quickly spending the money they receive. Velocity is a component of the quantity theory of money, which economists utilize to explain the effects of changes in the money supply on prices, output, and gross domestic product.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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