Asked by Preanna Williams on Apr 24, 2024
During the 2008 financial crisis velocity decreased. This means that the rate at which money changed hands
A) decreased.Other things the same, a decrease in velocity decreases the price level.
B) decreased.Other things the same, a decrease in velocity increases the price level.
C) increased.Other things the same, an increase in velocity decreases the price level.
D) increased.Other things the same, an increase in velocity increases the price level.
Financial Crisis
A situation where financial assets suddenly lose a large part of their nominal value, often leading to market crashes and economic downturns.
Velocity
In the context of economics, it refers to the rate at which money circulates or is exchanged in an economy over a specific period of time.
- Evaluate the quickness of money turnover by considering the quantities of money supply, money demand, and the Gross Domestic Product.
- Comprehend the concept of monetary neutrality and its relevance to economic theory and policy.
Learning Objectives
- Evaluate the quickness of money turnover by considering the quantities of money supply, money demand, and the Gross Domestic Product.
- Comprehend the concept of monetary neutrality and its relevance to economic theory and policy.