According to Keynes's theory of liquidity preference,velocity increases when
A)income increases.
B)wealth increases.
C)brokerage commissions increase.
D)interest rates increase.

Question

Quizplus · Accepted Answer

According to Keynes's theory of liquidity preference, velocity increases when interest rates increase because people are less inclined to hold onto money and more inclined to invest or spend it, thus increasing the rate at which money circulates in the economy.

According to Keynes's Theory of Liquidity Preference,velocity Increases When