If,in an economic panic,people decide to hold their money rather than spend it,the velocity of money will:
A) remain relatively constant.
B) increase.
C) decrease.
D) become unpredictable.

Question

Quizplus · Accepted Answer

When people hold onto their money rather than spending it, the velocity of money decreases. This is because the same amount of money is circulating less frequently throughout the economy, as fewer transactions are taking place.

If,in an Economic Panic,people Decide to Hold Their Money Rather