To say that the relationship between the velocity of money and the opportunity cost of holding money is not stable is the same as saying:

Question

Quizplus · Accepted Answer

The velocity of money refers to the speed at which money changes hands in the economy. When the opportunity cost of holding money is high, people tend to spend money quickly, which leads to a higher velocity of money. Conversely, when the opportunity cost of holding money is low, people tend to hold onto it longer, leading to a lower velocity of money. Since the opportunity cost of holding money can change due to various factors, such as changes in interest rates or inflation, the relationship between the velocity of money and the opportunity cost of holding money is not stable. This implies that money demand is not stable either as changes in the opportunity cost of holding money can affect the demand for money.

To Say That the Relationship Between the Velocity of Money