According to Liquidity Preference Theory, the Money-Supply Curve Would Shift

question 19

Multiple Choice

According to liquidity preference theory, the money-supply curve would shift rightward

• A)if the money demand curve shifted right.
• B)if the Federal Reserve chose to increase the money supply.
• C)if the interest rate increased.
• D)if the price level increased.

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Definitions:

Growth Rate

The rate at which a population, organism, or economic measure increases in size over a given period of time.

Exponential Growth

A process of increase in number or size, at a constantly growing rate.

J-shaped Curve

A concept or graphical representation showing a relationship between two variables where an initial increase in the independent variable results in a decrease in the dependent variable, followed by a significant increase.

Anti-predator Defense

Strategies and adaptations developed by animals to evade, deter, or survive attacks from predators.