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

Question

Quizplus · Accepted Answer

Keynes's model suggests that the velocity of money is positively related to interest rates because higher interest rates encourage people to hold less money and more interest-bearing assets, increasing the rate at which money circulates.

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