Velocity is ________ if the demand for money depends on the interest rate.
A) constant
B) zero
C) infinite
D) not constant

Question

Quizplus · Accepted Answer

If the demand for money depends on the interest rate, then velocity is not constant. This is because changes in the interest rate can affect the amount of money people hold, which in turn affects how frequently they spend it. Therefore, velocity is not a fixed number in this situation.

Velocity Is ________ If the Demand for Money Depends on the Interest