Which of the Following Will Reduce the Velocity of Circulation

question 77

Multiple Choice

Which of the following will reduce the velocity of circulation of the money stock?

• A)The inflation rate increases.
• B)The interest rate falls.
• C)Credit cards are used more frequently.
• D)More employees are paid once a week instead of once a month.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock that accrues dividends in case they are not paid as scheduled, ensuring that dividends are paid out before any dividends can be issued to common stock shareholders.

Dividends Per Share

The total amount of dividends declared by a company for each share of stock held.

Fiscal Year

A one-year period used for financial reporting and budgeting that may not align with the calendar year.

Cash Dividend

A distribution of profits by a corporation to its shareholders in the form of cash.