In economics, thenumber of timesoneunit of currency is spentover a givenperiod of time. It is indicative of howmucheconomic activityoccurs or is possible at a certainlevel of money supply. Theincomevelocity of moneytends to riseandfallconcurrentlywithinterest rates. It is calculatedthus:
Incomevelocity of money = GDP / moneysupply(howeverdefined).