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Also See 'Quantity Theory of Money'
Velocity of Money, is the rate of the transactions in a given economy. It is referred to the number of times money passes from one holder to another. The number of times goods are bought and sold in an economy is its velocity. If the velocity of money is increasing, then transactions are occurring between individuals more frequently.
'Velocity Of Money' The rate at which money is exchanged from one transaction to another, and how much a unit of currency is used in a given period of time. Velocity of money is usually measured as a ratio of GNP to a country's total supply of money.
It can refer to the income velocity of money, which is the frequency at which the average unit of currency is used to purchase newly domestically-produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time
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