A Rising Rate of Inflation

question 180

Multiple Choice

A rising rate of inflation

• A)makes people more willing to hold money as an asset
• B)reduces the usefulness of money as a store of value and thus increases the velocity of money
• C)increases the usefulness of money as a medium of exchange and thus reduces the velocity of money
• D)is usually preceded by a reduction in the money supply
• E)does not,apparently,have any effect on the velocity of money

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Definitions:

Outstanding Liabilities

Financial obligations that a company or individual has not yet settled.

Liquidated Assets

Assets that have been converted into cash or cash equivalents by selling them.

Partnership Liability

The legal obligations that partners in a business partnership are subject to, which can include debts, actions of other partners, and contractual obligations.

Considerable Damage

Significant physical or financial harm caused to property, individuals, or organizations.