According to the Theory of Liquidity Preference, If Output Increases

question 169

Multiple Choice

According to the theory of liquidity preference, if output increases

• A)people want to hold more money. This response is shown as a movement along the money demand curve.
• B)people want to hold more money. This response is shown as a shift of the money demand curve.
• C)people want to hold less money. This response is shown as a movement along the money demand curve.
• D)people want to hold less money. This response is shown as a shift of the money demand curve.

---

Definitions:

Net Income

The total earnings of a company after subtracting all expenses and taxes from its total revenues.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating the amount contributed toward covering fixed costs and generating profit.

Units Sold

The total number of a product's units that have been sold during a certain period.

Variable Costing

A costing method that includes only variable production costs in the cost of goods sold and treats fixed costs as period expenses.