Final answer:
The velocity of money is not stable over time; it became more variable in the 1980s due to banking and financial innovations.
Step-by-step explanation:
The statement, 'Velocity of money is relatively stable over time' is false. The velocity of money refers to how fast money moves through the economy, which can be calculated by dividing the nominal GDP by the money supply, such as M1. M1 includes currency in circulation and checking account balances.
Changes in the velocity of money are influenced by multiple factors, including banking innovations, electronic payments, and changes in how money is held in bank accounts. While the velocity appeared fairly predictable between 1960 and about 1980, it became more variable in the early 1980s. This variability is partly due to innovations in banking and finance, such as the growth of electronic payments, increased personal borrowing, and credit card usage.