As We Approached the End of the Millennium, Many Economic

question 163

Multiple Choice

As we approached the end of the millennium, many economic crackpots advised citizens to hold large quantities of cash in anticipation of Y2K disasters.What effect would this have had on velocity if many people had been foolish enough to follow this advice?

• A)It would have decreased.
• B)It would have increased.
• C)It would have remained constant.
• D)Velocity is unrelated to cash balances.