The Velocity of Money: Definition and Circulation Speed


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The velocity of money is a ratio of what quantities?

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1. Which of the following statements BEST explains the velocity of money?

2. All of the following impacts the velocity of money except

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About This Quiz & Worksheet

The following worksheet will teach you about the velocity of money, which refers to how quickly money changes hands in the economy during the year. The interactive quiz in conjunction with the worksheet will test you on the facts surrounding this important topic.

Quiz & Worksheet Goals

Use these assessment tools to gauge your knowledge of:

  • Define the velocity and what it refers to
  • Things that impact the velocity of money
  • Outcomes when the velocity of money is high

Skills Practiced

This worksheet and quiz let you practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on the velocity of money
  • Critical thinking - apply relevant concepts to examine how money changes hands in the economy and determine the velocity of money
  • Information recall - access the knowledge you've gained regarding what the velocity of money means and how it effects the economy

Additional Learning

To learn more about the rate at which money changes hands, review the corresponding lesson called The Velocity of Money: Definition and Circulation Speed. This lesson covers the following objectives:

  • Learn what a high velocity and low velocity of money means for the economy
  • Examines monetary policy
  • Discusses the equation of exchange