If the public decides to hold smaller cash balances, this will cause a(n)

Name: If the public decides to hold smaller cash balances, this will cause a(n)
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the public holds smaller cash balances, this means that money is changing hands more quickly (velocity is increasing). This can lead to an increase in transactional activity, which in turn can contribute to an increase in nominal GDP. It is not likely to directly affect interest rates or average paychecks.

If the Public Decides to Hold Smaller Cash Balances, This