According to Liquidity Preference Theory,if the Price Level Increases,then the Equilibrium

question 72

Multiple Choice

According to liquidity preference theory,if the price level increases,then the equilibrium interest rate

• A)rises and the aggregate quantity of goods demand rises.
• B)rises and the aggregate quantity of goods demanded falls.
• C)falls and the aggregate quantity of goods demanded rises.
• D)falls and the aggregate quantity of goods demanded falls.

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Definitions:

Investments

Assets purchased with the aim of generating income or appreciating in value over time, such as stocks, bonds, real estate, or other investments.

Equity Method

An accounting technique used to record investments in other companies where the investor holds significant influence but not full control or majority ownership.

Dividends

Payments made by a corporation to its shareholders, typically from profits, on a per-share basis.

Reduction

The act of decreasing or lowering in amount, quantity, or degree.