In the Simple Liquidity Preference Model, If the Money-Demand Curve

question 57

Multiple Choice

In the simple liquidity preference model, if the money-demand curve is elastic, then:

• A) small changes to the money supply will greatly affect interest rates.
• B) only large changes to the money supply will greatly affect interest rates.
• C) small changes to the money supply will minimally affect interest rates.
• D) large changes to the money supply will minimally affect interest rates.

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