Asked by
Nathan Miller
on Nov 11, 2024
Verified
Which of the following would cause an increase in the velocity of money?
A) An increase in the use of credit cards
B) An increase in the money supply
C) An increase in the demand for money
D) A decrease in the rate of interest
E) A decrease in nominal GDP and a constant money supply
Velocity of Money
The rate at which money is exchanged in an economy, highlighting how frequently a unit of currency circulates in a given time period.
Credit Cards
Payment cards issued by financial institutions allowing cardholders to borrow funds for purchases, which must be repaid along with any accrued interest.
Money Supply
The aggregate sum of liquid assets within an economy at a given time, including cash, bank deposits, and assets that can be quickly turned into cash.
- Elucidate the linkage among the speed of money circulation, price level increases, and the utilization of alternative forms of money.
- Uncover the factors that steer the rapidity of financial transactions and their impact on the economy's well-being.
Verified Answer
CV
Learning Objectives
- Elucidate the linkage among the speed of money circulation, price level increases, and the utilization of alternative forms of money.
- Uncover the factors that steer the rapidity of financial transactions and their impact on the economy's well-being.