Keynes's Liquidity Preference Theory Indicates That the Demand for Money

question 45

Multiple Choice

Keynes's liquidity preference theory indicates that the demand for money is

• A)constant.
• B)positively related to interest rates.
• C)negatively related to interest rates.
• D)negatively related to bond values.

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is kept by the company for reinvestment.

Brand Name

A unique design, sign, symbol, or words, or a combination of these, employed in creating an image that identifies a product and differentiates it from its competitors.

Parent-Company Extension Method

An accounting method used in consolidation that treats investments in subsidiaries as if they are direct extension of the parent company's operations, integrating their accounts directly.

Impairment Of Goodwill

An accounting charge that occurs when the book value of goodwill exceeds its recoverable amount.