Which One of the Following Will Cause Velocity to Increase

question 100

Multiple Choice

Which one of the following will cause velocity to increase?

• A)Decreasing the interest rates
• B)Increasing the efficiency of the payments system
• C)Switching from weekly to monthly payroll checks
• D)Increasing the money supply

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Definitions:

Goldsmith's Receipts

Historical documents representing deposits made with goldsmiths that evolved into a form of early banking, where receipts functioned as proof of money or valuables deposited for safekeeping.

Money Supply

The aggregate amount of monetary assets available within a country, encompassing notes, coins, and digital balances, influencing an economy's inflation and interest rates.

Basic Money Supply

Refers to the total volume of money available in the economy, typically including cash and easily accessible funds.

M1

M1 is a category of the money supply that includes all physical currency plus demand deposits and other liquid assets held by the central bank.