CFA Practice Question

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CFA Practice Question

The quantity of money that people plan to hold depends on all of the following except the ______.

A. velocity of circulation
B. price level
C. interest rate
Correct Answer: A

One more factor in this decision is real GDP.

User Contributed Comments 3

User Comment
VikramJ Couldn't you argue that velocity of circulation does effect the amount of money demanded? Higher velocity can cause inflation, which causes people to demand more money...
gill15 confused....that quantity of money people wish to hold is Money Demand. Money Demand M(Y,r,P) is an increasing function of GDP, decreasing function of interest rates and an increasing function of price. What am I missing here? How is this answer correct?
gill15 Never mind...didnt read which selection was wrong. Thought it said C. Idiot.
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