Changes in the growth rates for money supply and money velocity affect the growth rate in:

Question

Quizplus · Accepted Answer

Changes in the growth rates for money supply and money velocity can affect both real economic activity and the rate of inflation. An increase in the money supply could lead to an increase in inflation if the supply of goods and services does not increase at the same rate, while a decrease in the money velocity could lead to a decrease in real economic activity as people are spending less. Therefore, both options A and B are correct. Additionally, the turnover of goods and services (option C) is affected by changes in money velocity, as a higher velocity means that money is changing hands more frequently, which could indicate higher economic activity.

Changes in the Growth Rates for Money Supply and Money