Which of Keynes's Theories Does Liquidity Preference Refer To

question 99

Multiple Choice

Which of Keynes's theories does liquidity preference refer to?

• A)the effects of changes in money demand and supply on interest rates
• B)the effects of changes in money demand and supply on exchange rates
• C)the effects of wealth on expenditures
• D)the difference between temporary and permanent changes in income

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Definitions:

Physiological Changes

Alterations in the normal functions of living organisms, often as a response to environmental or internal processes.

James-Lange Theory

A psychological theory suggesting that emotions occur as a result of physiological reactions to events.

Physiological Changes

Alterations in the body's normal biological functions, which can occur due to various factors like stress, disease, or age.

Happiness

A mental or emotional state of well-being characterized by positive or pleasant emotions ranging from contentment to intense joy.