Which of the following statements is true about velocity?
A) In the short run, velocity varies but in the long run, velocity is relatively constant.
B) In the short run, velocity is relatively constant but in the long run, velocity varies.
C) Velocity is relatively constant in the short run and in the long run.
D) Velocity fluctuates with fluctuations in economic activity and changes in the growth rate of money supply.

Question

Quizplus · Accepted Answer

In the short run, velocity can vary due to changes in economic activity and monetary policy, but in the long run, it tends to be more stable as it is influenced by structural factors.

Which of the Following Statements Is True About Velocity