It Is Difficult to Test Whether the Velocity of Money

question 236

Multiple Choice

It is difficult to test whether the velocity of money is constant over time because

• A) there has been very little variation in the money supply over time.
• B) there may be a time lag between a change in the money supply and its effects on nominal GDP.
• C) there is only one definition of the money supply.
• D) it is difficult to measure the value of nominal GDP over time.