If the public's demand for cash increases, the growth rate of the velocity of money will
A) remain unchanged.
B) increase.
C) decrease.
D) become unpredictable.

Question

Quizplus · Accepted Answer

When the public's demand for cash increases, they hold onto money longer, reducing the frequency of transactions. This leads to a decrease in the velocity of money, which is the rate at which money circulates in the economy.

If the Public's Demand for Cash Increases, the Growth Rate