In the period since 1914,

Question

Quizplus · Accepted Answer

Neither M1 nor M2 velocity has been constant since 1914. The velocity of both M1 and M2 has fluctuated over the years due to changes in the economy, monetary policy, and other factors. For example, during times of recession or financial crisis, velocity tends to decrease as people hoard money and spend less. Conversely, during times of economic growth, velocity tends to increase as people have more money to spend and invest. These fluctuations in velocity have been particularly pronounced in recent decades due to the rise of digital payments and the shift away from cash-based transactions.

In the Period Since 1914