The Velocity of M1 Money Has Moved Erratically in the Past

question 25

Multiple Choice

The velocity of M1 money has moved erratically in the past several years because

• A)of low and stable rates of inflation
• B)of regulatory changes allowing banks to pay interest on checkable deposits
• C)interest rates have been stable
• D)monetary policy has been highly erratic
• E)a large number of banks and savings and loan associations have gone bankrupt

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Definitions:

GICs

Guaranteed Investment Certificates, fixed-term deposits offered by Canadian banks that guarantee a certain rate of return over a specified period.

Regulatory Approval

The official permission granted by governing bodies for a product or service to be legally sold or distributed.

Pharmaceutical Company

A company involved in the research, development, production, and marketing of drugs or pharmaceuticals.

Sales

The activities involved in selling goods or services in return for money or other compensation.