In His Liquidity Preference Framework,Keynes Assumed That Money Has a Zero

question 30

Multiple Choice

In his Liquidity Preference Framework,Keynes assumed that money has a zero rate of return;thus

• A)when interest rates rise,the expected return on money falls relative to the expected return on bonds,causing the demand for money to fall.
• B)when interest rates rise,the expected return on money falls relative to the expected return on bonds,causing the demand for money to rise.
• C)when interest rates fall,the expected return on money falls relative to the expected return on bonds,causing the demand for money to fall.
• D)when interest rates fall,the expected return on money falls relative to the expected return on bonds,causing the demand for money to rise.

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