Given that M / P = kY, when the demand for money parameter, k, is large, the velocity of money is _____, and money is changing hands _____.

Name: Given that M / P = kY, when the demand for money parameter, k, is large, the velocity of money is _____, and money is changing hands _____.
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Question

Quizplus · Accepted Answer

When k is large, it implies that people hold a lot of money relative to their income, meaning the velocity of money (1/k) is small, and money changes hands infrequently.

Given That M / P = KY, When the Demand