Which of the following is not responsible for the post-World War II rise in M1 velocity?
A) The relatively wide historical definition of M1
B) The increasing attractiveness of other categories of financial assets
C) Attractive yield on financial assets other than money
D) The lending of money to earn higher interest rates

Question

Quizplus · Accepted Answer

The wide historical definition of M1 would not be responsible for the post-World War II rise in M1 velocity. The other three options would all have an impact on the velocity of M1. B and C suggest that there are alternative financial assets that become more attractive than money, leading people to hold less money and use it more quickly. D implies that the opportunity cost of holding money rises, encouraging people to lend it out or invest it for higher returns.

Which of the Following Is Not Responsible for the Post-World