Which of the Following Statements Is Correct

question 94

Multiple Choice

Which of the following statements is correct?

• A)Both liquidity preference theory and classical theory assume the interest rate adjusts to bring the money market into equilibrium.
• B)Both liquidity preference theory and classical theory assume the price level adjusts to bring the money market into equilibrium.
• C)Liquidity preference theory assumes the interest rate adjusts to bring the money market into equilibrium;classical theory assumes the price level adjusts to bring the money market into equilibrium.
• D)Liquidity preference theory assumes the price level adjusts to bring the money market into equilibrium;classical theory assumes the interest rate adjusts to bring the money market into equilibrium.

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Definitions:

Strength Of Sensation

The intensity with which a sensory input is felt or experienced by an individual.

Psychological Intensity

The degree of strength or force of psychological phenomena, such as emotions, motivations, or experiences.

Stimulus Intensity

The magnitude or strength of a stimulus, which can influence the reaction or response it elicits.

Logarithm

The power to which a base number must be raised to produce a given number.