According to Liquidity Preference Theory, When Do People Demand Fewer

question 3

Multiple Choice

According to liquidity preference theory, when do people demand fewer goods and services?

• A) when the price level or interest rate increase
• B) when the price level or interest rate decrease
• C) when the price level increases or the interest rate decreases
• D) when the price level decreases or the interest rate increases

---

Definitions:

Skewed to the Right

Describes a distribution where the tail is longer on the right side, indicating that there are a number of outliers higher than the mode.

Test Statistic

A statistic derived from sample data in a hypothesis test that is utilized to determine if the null hypothesis should be discarded.

Rejection Region

The range of values for which the null hypothesis is not considered probable and is rejected in hypothesis testing.

P-value

The probability of obtaining test results at least as extreme as the results observed during the test, assuming that the null hypothesis is correct.