If the Demand for Money Is Relatively Stable

question 99

Multiple Choice

If the demand for money is relatively stable,

• A)the velocity of money will be constant.
• B)the velocity of money will grow at a steady and predictable rate.
• C)a fixed growth rate for the nominal money supply will lead to a stable growth rate of nominal GDP.
• D)B and C are both correct.

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Definitions:

Trade

The exchange of goods, services, or both between two or more parties, either within a country or across international borders.

Commodity Money

Anything that serves both as money and as a commodity; money that has intrinsic value such as gold or silver coins.

Double Coincidence

A situation in a barter system where two parties each hold an item the other wants, necessitating an exact match to complete an exchange.

Trade

The exchange of goods, services, or both between countries or individuals, allowing for the specialization and efficiency benefits.