Suppose at Present People Hold a Quantity of Money Equal

question 55

Multiple Choice

Suppose at present people hold a quantity of money equal to 80% of nominal GDP. What happens to velocity if people wish to increase their money holdings to 85% of nominal GDP?

• A) Velocity can increase or decrease depending on people's tastes and preferences toward money.
• B) Velocity is unaffected.
• C) Velocity increases.
• D) Velocity decreases.

---

Definitions:

Reference Column

A column in a table that is used to cross-reference or link the data in one table with data in another, facilitating data lookup and retrieval.

Sales Journal

A specialized accounting journal used to record all sales transactions of a company, usually on credit.

Cash Payments Journal

A financial journal used in accounting that records all cash outflows or payments made by a business, including expenses and debts.

Other Accounts Column

A section in accounting journals or ledgers for recording entries that do not fit into the standard categories of the accounting system.