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Velocity of money

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Velocity of money diagram
calc
The velocity theory of money is related to the quantity theory, and uses the equation of exchange which states that the amount of money multiplied by its velocity is equal to the rate of transactions multiplied by the price level.
Money
Price level
Expenditure index

Velocity
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This calc gives the velocity of money based on inputs of the total money in a system, the price level, and the expenditure index.
The velocity of money describes the number of times that each piece of money changes hands in a given period. Thus, the period of the study must be understood either implicitly or explicitly.