If something causes the velocity of money to increase,the same amount of money will
A)be able to support more transactions,so nominal GDP can increase
B)be forced to support more transactions,so nominal GDP will decrease
C)be able to support fewer transactions,so nominal GDP will decrease
D)no longer have to support so many transactions,so nominal GDP can increase
E)mean nothing can happen to nominal GDP

Question

Quizplus · Accepted Answer

When the velocity of money increases, it means that each unit of money is being exchanged more frequently for goods and services. This, in turn, leads to an increase in the number of transactions within the economy. As a result, the same amount of money can support more transactions, leading to an increase in nominal GDP.

If Something Causes the Velocity of Money to Increase,the Same