Question:
The bank is creating a new Internet banking strategy to entice new customers to sign up. Your manager has asked you to contribute to this strategy by describing how money works. In an e-mail to your manager, explain three functions of money in the economy. Then, describe what happens to the velocity of money when electronic forms of currency are widely used. As an example, calculate the velocity of money when nominal gross domestic product (GDP) is $1 trillion and the money supply is $250 billion.