The Theory of Liquidity Preference States That the Quantity of Real

question 52

Multiple Choice

The theory of liquidity preference states that the quantity of real money balances demanded is:

• A)negatively related to both the interest rate and income.
• B)positively related to both the interest rate and income.
• C)positively related to the interest rate and negatively related to income.
• D)negatively related to the interest rate and positively related to income.

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Definitions:

Profit-Maximizing

The process or strategy of adjusting production and operations to generate the highest possible profit.

Total Profit

Total profit is the financial gain made by a business after subtracting all expenses from the total revenue generated from sales and other sources.

Market Share

The share of a market that a certain product or company holds.

Profit-Maximizing

A process that enables a business to identify the price and production level that results in the greatest profit.