Marcus Is of the Opinion That the Theory of Liquidity

question 99

Multiple Choice

Marcus is of the opinion that the theory of liquidity preference explains the determination of the interest rate very well.Most economists would say that Marcus's opinion is

• A)Keynesian in nature,and that his view is more valid for the long run than for the short run.
• B)classical in nature,and that his view is more valid for the long run than for the short run.
• C)Keynesian in nature,and that his view is more valid for the short run than for the long run.
• D)classical in nature,and that his view is more valid for the short run than for the long run.

---

Definitions:

Deposits In Transit

Refers to money that has been received and recorded by a business but has not yet been recognized by the bank by the end of the accounting period.

Outstanding Checks

Checks that have been written and recorded in a company's financial records but have not yet been cashed or cleared by the bank.

Deposits In Transit

Funds that have been deposited by a company but not yet credited to its bank account.

NSF Check

A check that has been declined by a bank due to insufficient funds in the account it was drawn on.