According to Liquidity Preference Theory,a Decrease in the Price Level

question 22

Multiple Choice

According to liquidity preference theory,a decrease in the price level shifts the

• A)money demand curve rightward,so the interest rate increases.
• B)money demand curve rightward,so the interest rate decreases.
• C)money demand curve leftward,so the interest rate decreases.
• D)money demand curve leftward,so the interest rate increases.

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Definitions:

Nonlabor Resources

Resources used in the production of goods and services that do not involve labor, such as capital, land, and raw materials.

Worker

An individual who performs tasks or services for compensation; commonly refers to employees or laborers in various industries.

Average Variable Costs

The cost per unit of producing each good or service, excluding any fixed costs.

Average Total Costs

The total cost of production divided by the quantity of output produced, representing the cost per unit of output.