Economics (AS & A Level) · Feb / March 2025 · Paper 32 · Question 17
In the quantity theory of money equation, MV = PT, V is defined as the income velocity of circulation. Which change would tend to reduce the value of V?
- Aa move to monthly rather than weekly salary payments by firms
- Ban increase in interest rates
- Can increase in the use of cash machines to reduce money balances held
- Da decrease in the use of credit cards by individuals
As printed in the paper
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Correct answer: A. a move to monthly rather than weekly salary payments by firms
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