Question

Which of the following would cause an increase in the velocity of money? a) An increase in money supply b) An increase in demand for money c) Increased use of credit cards d) A decrease in interest rate

Answer 1

Answer:

a decrease in intrest rate

Answer 2

Answer:

B) An increase in demand for money.

Explanation:

• Basically it is the velocity with which in an economy money is being exchanged.

• So the number of times money is being transacted from one place to another is also known as velocity of money.

• The rate at which money is in demand in people is velocity of money.