In Friedman's Modern Quantity Theory,velocity Is Procyclical Because

question 2

Multiple Choice

In Friedman's modern quantity theory,velocity is procyclical because

• A)money demand depends on permanent income,which is more stable than actual income.
• B)money demand depends on actual income,which is more stable than permanent income.
• C)velocity depends upon interest rates,which are stable over the business cycle.
• D)velocity depends upon interest rates,which move procyclically.

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