The quantity equation of money can be re-written as the quantity theory of money when we assume velocity of money (V) to be constant. Assume there are three possible developments:

a. There is a rise in the number of shopping malls.
b. There is a rise in the number of banks operating.
c. There is a rise in the number of ATMs.
Which of the above can alter the money velocity, and how?

Question

The quantity equation of money can be re-written as the quantity theory of money when we assume velocity of money (V) to be constant. Assume there are three possible developments:

a. There is a rise in the number of shopping malls.
b. There is a rise in the number of banks operating.
c. There is a rise in the number of ATMs.
Which of the above can alter the money velocity, and how?

Quizplus · Accepted Answer

The Answer of The quantity equation of money can be re-written as the quantity theory of money when we assume velocity of money (V) to be constant. Assume there are three possible developments:

a. There is a rise in the number of shopping malls.
b. There is a rise in the number of banks operating.
c. There is a rise in the number of ATMs.
Which of the above can alter the money velocity, and how?

The Quantity Equation of Money Can Be Re-Written as the Quantity