The Loanable Funds Theory and the Liquidity Preference Theory Can

question 52

Multiple Choice

The loanable funds theory and the liquidity preference theory can be reconciled by recognizing that

• A)a flow over time results in a change in a stock.
• B)stock and flow variables are really the same thing.
• C)summing stock variables results in the total flow variable.
• D)the two theories can not be reconciled.

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Definitions:

Conglomerate

A large corporation formed by the merger of separate and diverse firms, focusing on a wide range of business activities and markets.

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, and other assets.

Vicarious Liability

A legal doctrine holding an individual or entity liable for the actions of another, based on the relationship between them, such as employer-employee.

Ultra Vires Rule

A legal doctrine that acts performed beyond the scope of a corporation's or entity's powers are invalid.