The velocity of circulation of money will be higher when the ________ is less than the requirements of the economy.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. demand for money.
The velocity of money increases when the demand for money is lower than the economy's requirements. In this case, people prefer to spend rather than hold money, leading to more frequent transactions. This boosts economic activity, as money circulates rapidly, increasing the overall flow of goods and services in the economy.