Empirical studies indicate that the velocity of money tends to increase when interest rates rise. Which of the following best explains why this is true?
a. When the velocity of money is high, banks will increase their lending interest rates.
b. An increase in the growth rate of GDP will cause the velocity of money to increase.
c. The higher interest rates increase the cost of holding money balances and, thereby, increase the velocity of money.
d. Both the velocity of money and interest rates will rise when the inflation rate falls.
C
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Legally established titles to the ownership, use, and disposal of factors of production are referred to as
A) property rights. B) Coase rights. C) pollution rights. D) emission rights. E) price-setting rights.
Why is it that a firm will typically not pay for general training?
A. The skills gained from the general training are transferable to other firms. B. General training is expensive. C. The benefits of general training depreciate quickly. D. General training does not increase worker productivity. E. General training is free.