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.

---

Definitions:

Trade Surplus

A situation where a country's exports exceed its imports over a given time period, reflecting a positive balance of trade.

Domestic Investment

The total capital expenditure within a country on physical assets like buildings, machinery, and technology by individuals, businesses, and the government.

U.S. Net Exports

Represents the value of a country's total exports minus its total imports, indicating whether a country is a net exporter or importer.

U.S. Net Capital Outflow

The unequal ratio of domestic purchases of overseas assets to foreign purchases of domestic assets.