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According to Liquidity-Preference Theory, How Does an Increase in the Price

question 29

Multiple Choice

According to liquidity-preference theory, how does an increase in the price level affect the interest rate and output demanded, respectively?


Definitions:

Fallacy Of Inductive Reasoning

The fallacy of inductive reasoning occurs when a conclusion is drawn from insufficient evidence or from specific instances that do not reliably lead to a general conclusion.

Post Hoc, Ergo Propter Hoc

A logical fallacy where it is assumed that because one event followed another, the first event was the cause of the second.

Fallacy Of Division

The erroneous assumption that what is true of a whole necessarily applies to its individual parts or members.

Post Hoc, Ergo Propter Hoc

A logical fallacy that assumes if one event occurs after another, the first event must have caused the second.

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