Enter the GDP and the money supply into the calculator to determine the velocity of money.

## Velocity of Money Formula

The following formula is used to calculate velocity of money.

VoM = GDP / MS

- Where VoM is the velocity of money
- GDP is the gross domestic product
- MS is the money supply

## Velocity of Money Definition

A velocity of money is defined as the ratio of the gross domestic product of a country to it’s money supply. In other words how fast money moves through it’s economy.

## Velocity of Money Example

How to calculate the velocity of money.

**First, determine the GDP.**Calculate the GDP using the calculator linked above or through research. For this example we will say the GDP is $1,000,000.00 (This is not realistic and will be much more for most countries).

**Next, determine the money supply.**For this example we will assume the money supply is $500,000.00.

**Finally, calculate the velocity of money.**Using the formula we find the velocity of money to be 1,000,000/500,000 = 2 (200%)

## FAQ

**What is velocity of money?**

Velocity of money is the measure or the rate at which money is moved or exchanged throughout in the economy of a given country. It can also be used to describe the number of times a unit of a specific currency is used in a given time.