The Reason That Velocity Increases When Interest Rates Rise Is

question 129

Multiple Choice

The reason that velocity increases when interest rates rise is

• A)the Fed encourages banks to turn money in faster for recycling, which causes money to move faster.
• B)the opportunity cost of saving increases, so people hold smaller cash balances.
• C)home mortgage payments increase, so people write larger checks that reduces their checking account balances.
• D)the opportunity cost of holding money increases, so average money balances decrease.

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Definitions:

Internalized Belief

A belief that an individual has adopted as their own, often unconsciously, which influences their thoughts and behaviors.

Antisocial Behavior

Actions that harm or lack consideration for the well-being of others, often violating the rights of other people and societal norms.

Delinquent Group

A group involved in activities that defy legal or societal norms, often related to juveniles.

Investigative Interview

A method of questioning used primarily by law enforcement or organizations to obtain detailed information and gather evidence.