If the Income Elasticity of Money Demand Is Less Than

Multiple Choice

If the income elasticity of money demand is less than 1, then

A) the velocity of money must decrease as the level of income increases
B) income can never increase faster than money supply
C) changes in the interest rate will never affect money demand
D) an increase in income will be reflected in a proportionately smaller increase in money demand
E) an increase in income will be reflected in a proportionately larger increase in money demand