Answer to Question #95238 in Macroeconomics for komal

Question

Define the term velocity of money . What factors determine the velocity of money in the classical system? What is the relationship between the velocity of money and the Cambridge k ?

Answer 1

The velocity of money is a measure that shows the average amount of use of one monetary unit of a country over a certain period of time (usually a year) in the process of generating income. The speed of money circulation affects - national income of the country

- Money mom of a specific

The Cambridge coefficient is a value inversely proportional to the velocity of money and this coefficient is called the liquidity preference coefficient, the Cambridge coefficient (monetization coefficient)