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Money supply: Velocity
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Money supply: Velocity
The ratio of GDP (final output/goods and services purchased by the end user) to the money supply
it is the rate at which supply travels through the financial system.
A higher velocity indicates that the economy is healthy and demand is high. Also that businesses are further along in the business cycle which leads to increased prices.
Formula is V = PB/M
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- CIMA Financial Planning Mind Map on Money supply: Velocity, created by Katerina Kritikos on 08/05/2022.
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- Katerina Kritikos
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