During the 1960s and 1970s, most monetarists believed that the velocity of money:
A) was stable.
B) was inversely related to the money stock.
C) moved in tandem with the money stock.
D) was irrelevant to the price level.

Question

Quizplus · Accepted Answer

During the 1960s and 1970s, most monetarists believed in the concept of a stable velocity of money, where the velocity of money was seen as relatively constant over time. This belief formed the basis of the monetarist theory of the quantity theory of money, which asserts that changes in the money supply will lead to proportional changes in nominal output.

During the 1960s and 1970s, Most Monetarists Believed That the Velocity