If the demand for money increases,this will:
A) increase velocity.
B) decrease velocity.
C) have no effect on velocity.
D) cause the Bank of Canada to increase the money supply.

Question

Quizplus · Accepted Answer

If the demand for money increases, people will want to hold onto more cash and as a result, spend less. This will decrease the velocity of money since fewer transactions will occur.

If the Demand for Money Increases,this Will