If the velocity of money is high
A) interest rates fall.
B) people hold onto money for a long period of time.
C) people hold onto money for a short period of time.
D) interest rates rise.

Question

Quizplus · Accepted Answer

When the velocity of money is high, it means that money is changing hands quickly and frequently. This indicates that people are not holding onto money for a long period of time, as they are using it to make purchases and investments. Therefore, the correct answer is C - people hold onto money for a short period of time.

If the Velocity of Money Is High