To say that the relationship between the velocity of money and the opportunity cost of holding money is not stable is the same as saying:

Question

Quizplus · Accepted Answer

The opportunity cost of holding money refers to the forgone interest or return that could have been earned if the money was invested. As this opportunity cost changes due to different interest rates, the demand for money also changes, thus making the velocity of money relation with opportunity cost unstable. Therefore, the correct statement would be that money demand is not stable. Options A, B, and C are not directly related to the instability of the velocity of money and are incorrect.

To Say That the Relationship Between the Velocity of Money