Supply of money
Purchasing power of money
Velocity of money
Value of money
Answer is Right!
Answer is Wrong!
The correct answer is C. Velocity of money.
The velocity of money is a measure of the number of times a unit of money is spent in a given period of time. It is calculated by dividing the nominal GDP by the money supply. The velocity of money is important because it affects the inflation rate. A higher velocity of money means that money is being spent more quickly, which can lead to inflation. A lower velocity of money means that money is being spent more slowly, which can lead to deflation.
The other options are incorrect.
- Option A, supply of money, is the total amount of money in circulation in an economy. It is measured by the M1 and M2 monetary aggregates.
- Option B, purchasing power of money, is the amount of goods and services that can be purchased with a unit of money. It is inversely related to the price level.
- Option D, value of money, is the purchasing power of money. It is also called the real value of money.