* The velocity of money is the speed at which money circulates: the average number of times each dollar is spent on final goods and services in a year. If MV=PQ, then V = PQ/M Example:
* If M = $1.6 trillion, Q = $6,4 trillion, and P = 2, then V = 8, so that a dollar must be spent an average of 8 times per year if a $1.6 tr. money supply is to support an output of $6.4 tr.
What is P? Is it a constant?
Thanks for the formula. I had it all wrong.