According to Liquidity Preference Theory, If the Price Level Decreases

question 103

Multiple Choice

According to liquidity preference theory, if the price level decreases, then

• A)the interest rate falls because money demand shifts right.
• B)the interest rate falls because money demand shifts left.
• C)the interest rate rises because money supply shifts right.
• D)the interest rate rises because money supply shifts left.

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Definitions:

End

The conclusion or final point of something, where it ceases to continue.

Recognition

The ability to match a piece of information or a stimulus to a stored image or fact.

Recall

The act of retrieving information or facts from one's memory without having the information present for reference, differing in context as a duplicated term but synonymous with retrieving learned information.

Priming

The process by which exposure to a stimulus influences a response to a subsequent stimulus, without conscious guidance or intention.