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Chapter 20: Q 3. (page 546)

If credit cards were made illegal by congressional legislation, what would happen to velocity? Explain your answer.

Short Answer

Expert verified

Velocity increases.

Step by step solution

01

Step 1. Define velocity.

The pace at which the location changes is defined as velocity.

02

Step 2. Explanation

Velocity refers to the rate at which the position changes.

The pace at which the location changes is called velocity. The displacement or position change (a vector quantity) per time ratio is the average velocity.

Velocity may increase as a result of the increased demand for money.

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Most popular questions from this chapter

Wikipedia has a detailed account of hyperinflationary episodes in a number of countries throughout history. Go to the page at https://en.wikipedia.org/wiki/ Hyperinflation#Notable_hyperinflationary_episodes. Which of the countries listed had the worst hyperinflationary episode? Which country has the most recent hyperinflationary episode?

Explain why the aggregate demand curve slopes downward and the short-run aggregate supply curve slopes upward.

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