Keynes's Theory That the Interest Rate Adjusts to Bring Money

question 67

Multiple Choice

Keynes's theory that the interest rate adjusts to bring money supply and money demand into balance is called:

• A) the theory of sticky wages
• B) the theory of sticky prices
• C) the classical dichotomy theory
• D) the theory of liquidity preference

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Definitions:

Cephalocaudal

a pattern of growth and development in humans where physical and motor skills progress from the head down to the feet.

Proximodistal

A pattern of growth and development in which development proceeds from the center of the body outward to the extremities.

Differentiation

The process of becoming more specialized or distinct in function or structure, often referred to in the context of cells, social roles, or psychological development.

Ventromedial

Relating to the ventromedial region of the brain, which is associated with regulating emotions and decision-making.