The ________ sensitive is the demand for money to interest rates,the more unpredictable velocity will be,and the link between the money supply and aggregate spending will be ________ clear.

Question

Quizplus · Accepted Answer

When the demand for money is more sensitive to interest rates, people are more likely to adjust their money-holding behavior in response to changes in interest rates, making the velocity of money more unpredictable. As a result, the link between the money supply and aggregate spending becomes less clear.

The ________ Sensitive Is the Demand for Money to Interest