People Are More Likely to Search for Explanations for Events

question 93

Multiple Choice

People are more likely to search for explanations for events that are

• A) expected.
• B) positive.
• C) personally relevant.
• D) ordinary.

---

Definitions:

Liquidity Preference Theory

Liquidity Preference Theory is a concept in Keynesian economics proposing that individuals prefer to hold their wealth in liquid form for convenience and security, influencing interest rates and economic activity.

Price Level

An index that measures the average of current prices across the entire spectrum of goods and services produced in the economy.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, usually on an annual basis.

Money-Demand Curve

Illustrates the relationship between the quantity of money people want to hold and the interest rate, showing how changes in the interest rate affect the demand for money.