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How Does a Rising Rate of Inflation Influence the Functions

Question 93

Multiple Choice

How does a rising rate of inflation influence the functions of money and the velocity of money?  


A)  Rising inflation makes people more willing to hold money as an asset, thus increasing the velocity of money. 
B)  Rising inflation reduces the usefulness of money as a store of value, thus increasing the velocity of money. 
C)  Rising inflation increases the usefulness of money as a medium of exchange, thus reducing the velocity of money. 
D)  Rising inflation reduces the usefulness of money as a store of value, thus reducing the velocity of money.

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