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.

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Definitions:

Breach

An act of breaking or failing to observe a law, agreement, or code of conduct.

Principal's Termination

The end of an agency relationship by the decision of the principal, who is the individual or entity that has empowered another to act on their behalf.

Exclusive Agency

An agency in which a principal grants an agent an exclusive territory and does not allow another agent to compete in that territory.

Liable

Refers to being legally responsible to compensate or rectify a damage, loss, or breach of contract.