Keynes's model of the demand for money suggests that velocity is
A)constant.
B)positively related to interest rates.
C)negatively related to interest rates.
D)positively related to bond values.

Question

Quizplus · Accepted Answer

Keynes's model suggests that as interest rates increase, people prefer to hold less money and more interest-bearing assets, increasing the velocity of money.

Keynes's Model of the Demand for Money Suggests That Velocity