Digital SAT Reading and Writing Practice Question #443

In standard macroeconomic models, the velocity of money—the rate at which currency changes hands in an economy—is typically assumed to be relatively stable, allowing central banks to predict inflation based primarily on the expansion of the money supply. During the 2008 financial crisis, central banks drastically increased the monetary base through quantitative easing, an action that models predicted would trigger high inflation. _______ inflation remained stubbornly low for over a decade, as widespread consumer caution and severely tightened lending standards caused the velocity of money to plummet, effectively neutralizing the inflationary pressure of the expanded money supply. Which choice completes the text with the most logical transition?