According to Liquidity-Preference Theory, If the Quantity of Money Demanded

question 122

Multiple Choice

According to liquidity-preference theory, if the quantity of money demanded is greater than the quantity supplied, what will happen to the interest rate and the quantity of money demanded?

• A) The interest rate will increase, and the quantity of money demanded will decrease.
• B) The interest rate will increase, and the quantity of money demanded will increase.
• C) The interest rate will decrease, and the quantity of money demanded will decrease.
• D) The interest rate will decrease, and the quantity of money demanded will increase.

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Definitions:

Mechanoreceptors

Sensory receptors that respond to mechanical pressure or distortion, involved in sensations such as touch and sound.

Hair Follicle Receptors

Sensory nerve fibers that surround each hair follicle and are sensitive to the movement of the hair, providing tactile feedback.

Mechanoreceptors

Sensory receptors that respond to mechanical pressure or distortion, involved in detecting touch, pressure, sound, and proprioception.

Brainstem

The brainstem is the structure located at the base of the brain that connects the cerebrum with the spinal cord, and is responsible for controlling vital life functions such as breathing, heart rate, and blood pressure.