velocity of money

(noun)

The average frequency with which a unit of money is spent on new goods and services produced domestically in a specific period of time.

Related Terms

Examples of velocity of money in the following topics:

  • Quantity Theory of Money

    • People's demand for money must equal the supply of money.
    • We denote the supply of money by MS and substitute it into the equation.
    • Furthermore, we solve for the velocity of money, shown in Equation 12.
    • For example, if the nominal GDP of the United States equals $15 trillion or P × Y, and the money supply is $1 trillion, then the velocity of money equals 15.
    • If the velocities for money do not change (i.e. equal zero), subsequently, the euro should appreciate by 2% against the U.S. dollar.

  • Defining Inflation

    • This idea is known as the quantity theory of money .
    • In mathematical terms, the quantity theory of money is based upon the following relationship: M x V = P x Q; where M is the money supply, V is the velocity of money, P is the price level, and Q is total output.
    • In the long run, the velocity of money (that is, how quickly money flows through the economy) and total output (that is, an economy's Gross Domestic Product) are exogenous.
    • Instead, for example, an increase in the money supply could boost total output or cause the velocity of money to fall.
    • This is consistent with the quantity theory of money.

  • Measuring the Money Supply

    • In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time.
    • In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time.
    • The different types of money are typically classified as "M"s.
    • M2 is a broader classification of money than M1.
    • V is the number of times per year each dollar is spent (velocity of money);

  • Other Measurements of the Money Supply

    • M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).
    • MZM: "Money Zero Maturity" is one of the most popular aggregates in use by the Fed because its velocity has historically been the most accurate predictor of inflation.
    • The different forms of money in the government money supply statistics arise from the practice of fractional-reserve banking.
    • This new type of money is what makes up the non-M0 components in the M1-M3 statistics.
    • The measures of the money supply are all related, but the use of different measures may lead economists to different conclusions.

  • Relative Velocity

    • Relative velocity is the velocity of an object B measured with respect to the velocity of another object A, denoted as $v_{BA}$.
    • Relative velocity is the velocity of an object B, in the rest frame of another object A.
    • Is the velocity of the fly, $u$, the actual velocity of the fly?
    • No, because what you measured was the velocity of the fly relative to the velocity of the boat.
    • The concept of relative velocity has to do with your frame of reference.

  • Tangent and Velocity Problems

    • Iinstantaneous velocity can be obtained from a position-time curve of a moving object.
    • In this atom, we will learn that instantaneous velocity can be obtained from a position-time curve of a moving object by calculating derivatives of the curve.
    • Velocity is defined as rate of change of displacement.
    • Slope of tangent of position or displacement time graph is instantaneous velocity and its slope of chord is average velocity.
    • For the simple case of constant velocity, the equation gives $x(t)-x_0 = v_0 (t-t_0)$.

  • Instananeous Velocity: A Graphical Interpretation

    • Instantaneous velocity is the velocity of an object at a single point in time and space as calculated by the slope of the tangent line.
    • A graphical representation of our motion in terms of distance vs. time, therefore, would be more variable or "curvy" rather than a straight line, indicating motion with a constant velocity as shown below.
    • To calculate the speed of an object from a graph representing constant velocity, all that is needed is to find the slope of the line; this would indicate the change in distance over the change in time.
    • The velocity of an object at any given moment is the slope of the tangent line through the relevant point on its x vs. t graph.
    • The velocity at any given moment is defined as the slope of the tangent line through the relevant point on the graph

  • Velocity and Duration of Muscle Contraction

    • The shortening velocity affects the amount of force generated by a muscle.
    • At a maximum velocity no cross-bridges can form so no force is generated, resulting in the production of zero power (right edge of graph).
    • The reverse is true for stretching of muscle; although the force of the muscle is increased, there is no velocity of contraction and zero power is generated (left edge of graph).
    • Maximum power is generated at approximately one-third of maximum shortening velocity.
    • Maximum power is generated at one-third of maximum shortening velocity.

  • Relativistic Addition of Velocities

    • A velocity-addition formula is an equation that relates the velocities of moving objects in different reference frames.
    • A velocity-addition formula is an equation that relates the velocities of moving objects in different reference frames.
    • As Galileo Galilei observed in 17th century, if a ship is moving relative to the shore at velocity $v$, and a fly is moving with velocity $u$ as measured on the ship, calculating the velocity of the fly as measured on the shore is what is meant by the addition of the velocities $v$ and $u$.
    • This change isn't noticeable at low velocities but as the velocity increases towards the speed of light it becomes important.
    • Composition law for velocities gave the first test of the kinematics of the special theory of relativity.

  • Addition of Velocities

    • Relative velocities can be found by adding the velocity of the observed object to the velocity of the frame of reference it was measured in.
    • As learned in a previous atom, relative velocity is the velocity of an object as observed from a certain frame of reference.
    • demonstrates the concept of relative velocity.
    • When she throws the snowball forward at a speed of 1.5 m/s, relative to the sled, the velocity of the snowball to the observer is the sum of the velocity of the sled and the velocity of the snowball relative to the sled:
    • The magnitude of the observed velocity from the shore is the square root sum of the squared velocity of the boat and the squared velocity of the river.