TeachMeFinance.com - explain velocity
velocity -- (1) the rate at which money flows from one transaction to another. The number of times money changes hands in a given time period. (2) the rate at which total money in circulation is spent on goods and services in a given time period (usually measured as the ratio of GNP to the money stock). Greater velocity thus means that a given amount of money is used for a higher dollar volume of transactions.
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