A Rising Rate of Inflation

Multiple Choice

A rising rate of inflation:

A) makes people more willing to hold money as an asset.
B) reduces the usefulness of money as a store of value and thus increases the velocity of money.
C) increases the usefulness of money as a medium of exchange and thus reduces the velocity of money.
D) is usually preceded by a reduction in the money supply.
E) does not have any effect on the velocity of money.