Which of the Following Would Most Likely Lower the Velocity

question 49

Multiple Choice

Which of the following would most likely lower the velocity of money?  

• A) commercial innovations that facilitate exchange 
• B) a lower inflation rate 
• C) a decline in the effectiveness of money as a store of wealth 
• D) paying workers once a week instead of once a month

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Definitions:

Dividends Payable

A liability account that represents the amount a company owes to its shareholders as declared dividends but has not yet paid out.

Paid-in Capital

Funds raised by a company through the sale of shares to investors, representing the equity capital invested in the business.

Reacquire Stock

The process by which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock.

Stock Option Plans

A compensation strategy companies use, offering employees the option to buy company stock at a specific price for a certain period.