When the demand for money parameter, k, is large, the velocity of money is ______ and money is changing hands ______
A) large; frequently
B) large; infrequently
C) small; frequently
D) small; infrequently

Question

Quizplus · Accepted Answer

When the demand for money parameter, k, is large, it means that people want to hold onto their money for longer periods, leading to a smaller velocity of money as it changes hands less frequently.

When the Demand for Money Parameter, K, Is Large, the Velocity