In Keynes's Liquidity Preference Framework

question 19

Multiple Choice

In Keynes's liquidity preference framework

• A)the demand for bonds must equal the supply of money.
• B)the demand for money must equal the supply of bonds.
• C)an excess demand of bonds implies an excess demand for money.
• D)an excess supply of bonds implies an excess demand for money.

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Definitions:

At-risk Amount

The amount of money an investor could lose in an investment, emphasizing the capital actually at risk.

Passive Loss Rules

U.S. tax regulations that restrict the amount of losses investors can claim from passive activities to the amount of income generated by those activities.

Gain(Loss)

The profit or shortfall realized from an investment when comparing the sale price to the original purchase price.

At-risk Amount

The maximum amount of money an investor in certain activities can claim as a deduction or loss, limited to the actual cash, property, or borrowed amounts for which they are personally at risk.