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What term is a measure of the speed in which cash is spent by entrepreneurial firms, which often have negative income and a high growth rate?.

Sagot :

Lanuel

A term which measures the speed in which cash is spent by entrepreneurial firms, which often have negative income and a high growth rate is the: velocity of money.

What is money?

Money can be defined as any formally recognized economic unit that's universally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.

What is the velocity of money?

The velocity of money can be defined as a measure of the number of times (rate, speed, or frequency) that the average unit of currency is used by an individual or entrepreneurial firms to purchase goods and services within a particular period of time.

Mathematically, the velocity of money can be calculated by using this formula:

VoT = PT/M

Where:

  • VoT represents the velocity of money.
  • P represents the price level.
  • T represents the aggregate real value of transactions within a particular period of time.
  • M represents the total nominal amount of money.

In conclusion, we can reasonably infer and logically deduce that terminology which measures the speed in which cash is spent by entrepreneurial firms, which often have negative income and a high growth rate is referred to as the velocity of money.

Read more on the velocity of money here: https://brainly.com/question/28524880

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