How Does a Rising Rate of Inflation Influence the Functions

question 93

Multiple Choice

How does a rising rate of inflation influence the functions of money and the velocity of money?  

• A) Rising inflation makes people more willing to hold money as an asset, thus increasing the velocity of money. 
• B) Rising inflation reduces the usefulness of money as a store of value, thus increasing the velocity of money. 
• C) Rising inflation increases the usefulness of money as a medium of exchange, thus reducing the velocity of money. 
• D) Rising inflation reduces the usefulness of money as a store of value, thus reducing the velocity of money.

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Definitions:

Informal Communication System

Communication that takes place outside formal channels, often spontaneously or through social interactions.

Formal Organizations

Structured groups characterized by well-defined roles, regulations, and systems intended to achieve collective goals efficiently.

Synergy

The creation of a whole that is greater than the simple sum of its parts, often in a collaborative context.

Norming

A stage in team development where members establish norms and standards for behavior and work processes, leading to more cohesive and cooperative efforts.