This one is probably pretty simple. Are the two tings inversely related? If companies and individuals feel sceptical about the future, and become reluctant to turn loose of their money, thereby hoarding it, causing the velocity to grind down slower, or is it opposite. Is it a situation where economic activity is escalating without a corresponding increase in the quantity of money causing the same amount of money to have to circulate faster (velocity)?
Why would the companies feel skeptical about the future?
Yes.
Yes.
No, in this case it is not of necessity that the demand for money is affected. It is entirely possible that the demand for money will stay the same whilst the purchasing power goes up. (Imagine S and D curves for money, as more goods are produced the D curve shifts to the right and the price increases). Of course, it’s possible that do to increased purchasing power of the money unit the demand for money will decrease (money is hedge against uncertainty).