Which of the Following Principles Does the Theory of Liquidity

question 124

Multiple Choice

Which of the following principles does the theory of liquidity preference illustrate?

• A)Monetary policy can be described either in terms of the money supply or in terms of the interest rate.
• B)Monetary policy can be described either in terms of the exchange rate or the interest rate.
• C)Monetary policy must be described in terms of the money supply.
• D)Monetary policy must be described in terms of the interest rate.

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