In which quarter(s) was the percentage change in velocity

In which quarter(s) was the percentage change in velocity positive?

Choose one or more: A. Q1 2020

B. Q2 2020

C. Q3 2020

Part 2 (2 points)

Let’s focus on the second quarter since the change in velocity is so dramatic. During that quarter, the CPI fell by 0.9%, real GDP fell by 9.0%, the money supply rose by 23%, and velocity changed by %. Give your answer to one decimal.

Part 3 (2 points)

Which of the following can explain such a large change in velocity that occurred during the second quarter?

Choose one: A. People and banks were spending their money at faster rates.

B. There was a substantial increase in the money supply.

C. People and banks were holding on to their money longer.

D. The inflation rate was negative.


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