Final answer:
The correct answer is B) more; quickens. As the pace of financial innovation increases, defining money becomes more complex due to new forms of representing value, like cryptocurrencies, making traditional definitions less clear. Financial markets and mechanisms like the money multiplier further illustrate these complexities.
Step-by-step explanation:
The question asks which statement is correct regarding the difficulty of defining money in the context of financial innovation. The correct answer is B) more; quickens. As the pace of financial innovation quickens, defining money becomes more difficult because new financial tools and vehicles emerge that may act as substitutes for traditional forms of money or introduce new ways of representing value. Money has evolved from physical objects like coins and paper bills to include digital forms and sophisticated financial instruments, complicating the traditional definitions of money. Examples of financial innovation include cryptocurrency and mobile payment platforms, which challenge the conventional role of currency in commerce.
Financial markets and instruments are an integral part of the economy, affecting not only the definition of money but also the overall money supply. For instance, when discussing how bonds affect the money supply or the mechanism of the money multiplier in the context of banking, these are key concepts that illustrate the complex nature of modern-day finance and the role of institutions in managing the quantity of money and credit in the economy.