Under which of the following circumstances will velocity of money be higher?
A) when workers are paid less frequently
B) when fewer transactions are made
C) when money is less effective as a store of value
D) when fewer people use credit cards to make purchases

Question

Under which of the following circumstances will velocity of money be higher?  
A) when workers are paid less frequently 
B) when fewer transactions are made 
C) when money is less effective as a store of value 
D) when fewer people use credit cards to make purchases

Quizplus · Accepted Answer

The velocity of money is higher when money is less effective as a store of value because people are more likely to spend it quickly rather than save it, leading to more rapid circulation of money within the economy.

Under Which of the Following Circumstances Will Velocity of Money